John Mweluka & Anor v Mustafa Katende Star (Civil Suit No. 244 of 2003) [2004] UGCommC 8 (23 March 2004)

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COURT AT KAMPALA \line (COMMERCIAL COURT) \line }{\lang1033\langfe2057\langnp1033\insrsid12329537 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 CIVIL SUIT NO. 244 OF 2003 \line }{\lang1033\langfe2057\langnp1033\insrsid12329537 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid12329537 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 1. JOHN MWELUKA \line 2. TOM MULEGI}{ \lang1033\langfe2057\langnp1033\insrsid12329537 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 PLAINTIFFS \line }{ \lang1033\langfe2057\langnp1033\insrsid12329537 \par }\pard \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid12329537 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 VERSUS \line }{ \lang1033\langfe2057\langnp1033\insrsid12329537 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid12329537 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 MUSTAFA KATENDE STAR}{ \lang1033\langfe2057\langnp1033\insrsid12329537

\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 DEFENDANTS \line BEFORE: }{ \ul\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 THE HONOURABLE MR. JUSTICE JAMES OGOOLA \line }{\ul\lang1033\langfe2057\langnp1033\insrsid12329537 \par }\pard \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid12329537 {\b\ul\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 JUDGEMENT }{ \b\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 \line }{\b\lang1033\langfe2057\langnp1033\insrsid12329537 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid12329537 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 The Plaintiffs sued the }{ \lang1033\langfe2057\langnp1033\insrsid12329537\charrsid13857959 Defendant}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 in both contract (breach) and tort (deceit). Briefly, the facts of the case were stated to be as follows. That on 24/09/2001, the Defendant represented to both }{\lang1033\langfe2057\langnp1033\insrsid12329537\charrsid13857959 Plaintiffs}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 that he had

w}{\lang1033\langfe2057\langnp1033\insrsid12329537 on a tender from Mpigi District }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Administration for the construction of a school and pit latrines; and for the making of school desks. He invited the Plaintiff to join him in this tender by contributing Uhs.35m/= towards its implementation (Purchase of building m aterials), which contribution would entitle them to one half of the profits from}{\lang1033\langfe2057\langnp1033\insrsid12329537 that project. (Stated to be 35m/}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 =). \line }{ \lang1033\langfe2057\langnp1033\insrsid12329537 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 The Plaintiffs agreed to the Defendant\rquote s invitation; and commenced to make series of Payments towards their allotted contribution. In all, they made payments amounting to UShs.5}{ \lang1033\langfe2057\langnp1033\insrsid5649762\charrsid13857959 , 000,000}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 /=. These payment which were made between 25/09/2001, were duly acknowledged by the Defendant in writing (see receipts marked Exh. P1-P3). Thereupon the Defendant assured the Plaintiff that work was going to start on the sites in October, 2001. \line }{ \lang1033\langfe2057\langnp1033\insrsid5649762 \par

}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 In October 2001, the Plaintiffs made up to S visits to the sites to gauge Defen}{\lang1033\langfe2057\langnp1033\insrsid5649762 dant\rquote s progress on the project -}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 however, they fo}{\lang1033\langfe2057\langnp1033\insrsid5649762 und no sign of any work at all -}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 though the Defendant }{ \lang1033\langfe2057\langnp1033\insrsid5649762\charrsid13857959 continuously}{\lang1033\langfe2057\langnp1033\insrsid5649762 assured them}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 that all was well. Ultimately, in November, 2001, the Plaintiffs decided to check with the District Administration officials as to the existence of the Defendant\rquote s alleged}{\lang1033\langfe2057\langnp1033\insrsid5649762 }{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 tender. They found no name of the Defendant among the names of tenderers listed on the District\rquote s notice board. The District officials confirmed to the Plaintiffs that indeed the Defendant was not one of the Districts\rquote tenderers. When challenged by the Plaintiffs to prove the existence of his alleged tender, the Defendant promised, but failed, to appear at the District Headquarters on the agreed date.

Later, thoroughly embarrassed by all this, Defendant promised to cancel the \'93first business\'94 with the Defendants, and to refund them their money. He did not honour his promise. In August 2002, the Defenda}{\lang1033\langfe2057\langnp1033\insrsid5649762 nt once more promised a refund -}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 this time did so by way of a written commitment Exh. P4 to start }{\lang1033\langfe2057\langnp1033\insrsid5649762\charrsid13857959 installment}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 payments, commencing on 12/09/2002 and ending 12/10/2002. To date, Def}{\lang1033\langfe2057\langnp1033\insrsid5649762 endant has not made any refund -}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 despite the demands made in that brief by}{\lang1033\langfe2057\langnp1033\insrsid5649762 the Plaintiffs (see Exh. }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 P6). \line }{\lang1033\langfe2057\langnp1033\insrsid5649762 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 The above facts were duly testified to in this Court by two witnesses: Tom Mulegi}{\lang1033\langfe2057\langnp1033\insrsid5649762 (PW1), and John Mweluka (PW2) -}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 the two Plaintiffs. As the Defendant did not come to Court on the

d}{\lang1033\langfe2057\langnp1033\insrsid5649762 ay of the hearing of this case -}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 despite having been duly served (per affidavit of serve of Mr. S}{\lang1033\langfe2057\langnp1033\insrsid5649762 ebamanya deponed on 07/07/2003 -}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 the matter was allowed to proceed }{\i\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 ex parte. }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Accordingly, the evidence by PW1 and PW2 was unchallenged and uncontroverted. The two witnesses were strictly, consistent and firm in the delivery of their evidence. I found them to be truthful. I accept their evidence. \line }{ \lang1033\langfe2057\langnp1033\insrsid5649762 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 In the result, I agree with the submissions of the learned counsel for the Plaintiffs to the effect that: \line }{\lang1033\langfe2057\langnp1033\insrsid5649762 \par }\pard \s15\ql \fi-720\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\ipgp1\pararsid5649762 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (a) }{ \lang1033\langfe2057\langnp1033\insrsid5649762 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 there was a

valid contract between the Plai ntiffs and the Defendant; and the Defendant breached that contract. He got a consideration of Ushs.5m/= as a share contribution for the joint project; but failed or refused to honour his part of the }{ \lang1033\langfe2057\langnp1033\insrsid5649762\charrsid13857959 contractual}{\lang1033\langfe2057\langnp1033\insrsid5649762 obligation - }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 namely construction of the schoo l and pit latrines, let alone maki}{\lang1033\langfe2057\langnp1033\insrsid5649762 ng the promised school desks; \line }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 \par (b) }{\lang1033\langfe2057\langnp1033\insrsid5649762 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Defendant by his statement conduct, clearly committed a direct and dishonest deceit and fraudulent misrepresentation on the Plaintiffs, with a view to extorting money from them. In thi s regard I am satisfied that all the ingredients of deceit have been proved in this case, namely: \line }{\lang1033\langfe2057\langnp1033\insrsid5649762 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (a) }{\lang1033\langfe2057\langnp1033\insrsid5649762 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 that the Defendant by his words and conduct made a representation of fact (i.e. to the

effect that he had won a tender at the District Administration of Mpigi); \line }{\lang1033\langfe2057\langnp1033\insrsid5649762 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (b) }{\lang1033\langfe2057\langnp1033\insrsid5649762 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 that he made that representation, knowing it to be false \line }{ \lang1033\langfe2057\langnp1033\insrsid5649762 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (c) }{\lang1033\langfe2057\langnp1033\insrsid5649762 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 that he made that representation with the intention that it should be acted upon by the Plaintiffs, in the manner in which damage resulted to the Plaintiffs; \line }{\lang1033\langfe2057\langnp1033\insrsid5649762 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (d) }{\lang1033\langfe2057\langnp1033\insrsid5649762 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 that the Plaintiffs did indeed act upon the Defendants\rquote false representation; \line }{\lang1033\langfe2057\langnp1033\insrsid5649762 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (e) }{\lang1033\langfe2057\langnp1033\insrsid5649762 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 that the Plaintiffs have sustained

damage/loss. \line }{ \lang1033\langfe2057\langnp1033\insrsid5649762 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid5649762 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 As to the loss and damage suffered by the Plaintiffs, one element is eminently clear. The Plaintiff lost UShs.5}{\lang1033\langfe2057\langnp1033\insrsid5649762\charrsid13857959 , 000,000}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 /= by way of the share contributions withdrawals advanced to the Defendant during the period 24/09/2001 to 30/09/2001. In addition, Plaintiffs also claimed UShs.30}{\lang1033\langfe2057\langnp1033\insrsid5649762\charrsid13857959 , 000,000}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 /= as the profits expected from the Defendants\rquote representation that their Ushs.5m/= investment would produce a profit of 30m/=. In support of this contention, Plaintiffs relied on the case of }{\b\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Bank of Uganda v Fred Masaba CA. No. 3/98 }{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (unreported). However, the Bank of Uganda case is clearly distinguishable from the instant case. The latter case (unl ike the present case) involved the promise of a retirement package to

employees who opted to retire early. Such a promise is a definitive promise and commitment to deliver the promised amount. In the instant case, the promise was dependent on the vagaries of any investment. Implicit in any such promise in the indefiniteness and speculation associated with investment. The profits may or may not materialise; and }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid485935 if}{ \i\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 they do, they may materialise below, at or ev}{\lang1033\langfe2057\langnp1033\insrsid485935 en above the promised amount. \line }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid12329537 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 In light of these , I am not satisfied that Plaintiffs proved their claim for UShs.30m/. But quite apart from proof, to expect a profit of 30m/= from an investment of UShs.5m/= is not only unrealistic, it is outright extortionate. That would have been a profit margin of 60 0%. Worse still that level of profit was expected to be made not in the long or even medium term \emdash but in a very short while; may be within a period of perhaps one to two

months (i.e. the period it would take to dig and construct a pit latrine or make schoo l desks). It is not worthy in this regard that the Plaintiffs did not indicate the period of the investment. Therefore Court has no option but to conclude that the claim for a profit of UShs.30m/= was both speculative and fanciful. \line }{ \lang1033\langfe2057\langnp1033\insrsid485935 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 In the premises, Court hereby grants the Plaintiffs: \line }{\lang1033\langfe2057\langnp1033\insrsid485935 \par }\pard \s15\ql \fi720\li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid485935 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (a) }{ \lang1033\langfe2057\langnp1033\insrsid485935 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 their }{\lang1033\langfe2057\langnp1033\insrsid485935 claim for a refund of the Ushs.5}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 m/=. \line }{\lang1033\langfe2057\langnp1033\insrsid485935 \par }\pard \s15\ql \fi-720\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\ipgp1\pararsid485935 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (b) }{ \lang1033\langfe2057\langnp1033\insrsid485935 \tab

}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Interest on that amount at the rate of 18% p.a. from 01/10/2001 until payment in full. \line }{ \lang1033\langfe2057\langnp1033\insrsid485935 \par }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (c) }{\lang1033\langfe2057\langnp1033\insrsid485935 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Their claim for travel expenses to and from Kabibi, Mp}{ \lang1033\langfe2057\langnp1033\insrsid485935 igi and the sites of the works -}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 in an amount of UShs.500}{\lang1033\langfe2057\langnp1033\insrsid485935\charrsid13857959 , 000}{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 /}{\lang1033\langfe2057\langnp1033\insrsid485935 =}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 and \line }{\lang1033\langfe2057\langnp1033\insrsid485935 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid485935 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 (d) }{ \lang1033\langfe2057\langnp1033\insrsid485935 \tab }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 The costs of this suit \line }{\lang1033\langfe2057\langnp1033\insrsid485935 \par }\pard \s15\ql

\li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid485935 {\b\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Ordered accordingly. \line }{ \lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 James Ogoola \line }{\ul\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 JUDGE }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 \line 24/03/2004 \line }{ \lang1033\langfe2057\langnp1033\insrsid485935 \par }{\ul\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 DELIVERD IN OPEN COURT, BEFORE: }{\lang1033\langfe2057\langnp1033\insrsid485935 \line Charles Mbogo, Esq -}{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 Counsel for the Plaintiffs \line J. M. Egetu \emdash Court Clerk \line }{\lang1033\langfe2057\langnp1033\insrsid485935 \par }\pard \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid485935 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 James Ogoola \line }{ \ul\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 JUDGE }{\lang1033\langfe2057\langnp1033\insrsid485935 \line 24/03/2004 \line }{\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 \par }\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12329537 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\lang1033\langfe2057\langnp1033\insrsid681799\charrsid13857959 \par }}