Wakilii

Uganda Broadcasting Corporation v Appliance World Ltd (H.C.Miscellaneous Application No. 1298 of 2017)

High Court · [2021] UGCOMMC 75 · 2021 Application Granted — Contempt Found AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated applications: first to set aside statutory demand under Insolvency Act; second for contempt of court for non-compliance with consent judgment
Decision
Applicant found in contempt and ordered to pay the consent debt plus interest and fine

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the creditor was entitled to compensatory interest at 10% per annum from judgment date on a consent debt because the debtor kept the creditor out of use of its money for six years. The court found the debtor in contempt for failing to comply with the consent payment schedule without valid excuse. Costs were awarded to the creditor as the successful party.

Outcome

Applicant found in contempt and ordered to pay the consent debt plus interest and fine

Facts

Appliance World Limited served a statutory demand on Uganda Broadcasting Corporation for a debt arising from supply of air conditioning equipment. UBC contested the demand. During pendency of proceedings, parties agreed to an out-of-court settlement on a principal sum of UGX 248,329,796.80, payable in six equal instalments starting 31 December 2020. The parties could not agree on interest and costs, so the court ordered submissions on those issues. UBC failed to make the agreed payments. Appliance World applied for contempt of court. UBC claimed inability to pay because its bank accounts were attached by URA, but the attachment notice was issued on 24 February 2021, by which time at least two instalments should have been paid.

Issues

  1. Whether the respondent is entitled to interest on the principal sum agreed in the consent judgment.
  2. Whether the applicant acted in contempt of the court judgment in Misc. Cause 1298 of 2017 by failing to pay as agreed.
  3. Whether the respondent is entitled to costs of the application.

Orders

  • Applicant declared in contempt of the judgment in Misc. Cause No. 1298 of 2017.
  • Applicant to immediately pay respondent UGX 248,329,796.80 as the decretal sum.
  • Applicant to pay into court UGX 5,000,000 as a fine for contempt of court.
  • Applicant to pay respondent commercial interest at 10% per annum on the principal sum from date of filing the application till payment in full.
  • Applicant to pay costs of Misc. Cause 1298 of 2017 and this application.

Rules and key headnotes

Commercial Law — Interest — Compensatory Interest on Consent Judgments — Discretion to Award
An award of interest on a principal sum adjudged by consent is discretionary under Section 26 of the Civil Procedure Act and may be compensatory where the defendant has kept the plaintiff out of use of its money, even absent contractual provision for interest.
Commercial Law — Interest — Rate of Interest — Commercial Rate Appropriate for Commercial Transactions
Where a debt arises from a commercial transaction, a commercial rate of interest rather than the court rate is appropriate. The basis is that the defendant received money for a commercial purpose and benefited from it.
Civil Procedure — Contempt of Court — Elements to be Established
To establish contempt of court, the applicant must prove: (i) the existence of a lawful order; (ii) the potential contemnor's knowledge of the order; (iii) the potential contemnor's ability to comply; and (iv) the potential contemnor's failure to comply.
Civil Procedure — Contempt of Court — Consent Orders — Presumption of Ability to Comply
Where a party agrees to an out-of-court settlement and proposes a payment schedule, it is reasonably presumed that the party had the ability to comply with those terms. Failure or refusal to pay at the agreed times without valid excuse constitutes contempt of court.
Administrative Law — Insolvency Proceedings — Statutory Demand — Proper Use
Insolvency proceedings aim at enforcing rights, not establishing them. A statutory demand is a permissible means for a creditor to demand payment from a debtor where the debt is established, but the companies' court cannot properly be used for the purpose of debt collection where rights remain to be determined.
Civil Procedure — Costs — Costs Follow the Event — Discretion
As a general rule, costs follow the event unless there are special circumstances justifying a different order. The successful party in contested proceedings is ordinarily entitled to costs in the absence of misconduct or other compelling reason.

Legislation cited (8)

Cases cited (13)

  • Midland Emporium Ltd v Sugar and Allied Industries Limited (H.C.Civil Suit No. 734 of 2017)
  • Gentex Enterprises Ltd v M&B Engineers Ltd (H.C.Civil Suit No. 74 of 2013)
  • Kenya Ports Authority Vs Kobil (Kenya) Ltd Nairobi, Milimani High Court Civil Case Number 83 of 1998
  • Adjumani Service Station v Fredrick Batte (H.C.Civil Suit No. 345 of 2014)
  • DFCU Bank (U) Ltd v Ms Ndibazza & Anor (H.C.Civil Suit No. 80 of 2012)
  • Justus Kyabahwa v China Henan International Cooperation Group Company Limited (H.C.Civil Suit No. 721 of 2020)
  • Premchandra Shenoi and Anor v Maximov Oleg Petrovich (Supreme Court Civil Appeal No. 9 of 2003)
  • SIETCO Vs NOBLE BUILDERS (U) Ltd
  • Stanbic Bank (U) Ltd and Jacobsen Power Plant Ltd v Uganda Revenue Authority (Miscellaneous Application No. 42 of 2010)
  • Candiru Alice v Amandu Fenisto & 2 Others (H.C.Civil Suit No. 0019 of 2014)
  • Candiru Alice v Amandua Fenisto & Others (H.C.Civil Suit No. 19 of 2014)
  • Anglo-Cyprian Trade Agencies Ltd Vs. Paphos Wine Industries Ltd, [1951] 1 All ER 873
  • Mbale Resort Hotel Limited v Babcon (U) Limited (H.C.Miscellaneous Cause No. 24 of 2018)

Full judgment

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

Uganda Broadcasting Corporation v Appliance World Ltd (H.C.Miscellaneous Application No. 1298 of 2017) [2021] UGCommC 75 (19 August 2021)
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.