THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 987 OF 2013

(ARISING FROM MISCELLANEOUS APPLICATION NO 608 OF 2012, MISCELLANEOUS APPLICATION NO 348 OF 2012 AND HCCS NO 161 OF 2010)

DAMCO LOGISTICS (U) LIMITED}........................................................                                                                                                         APPLICANT

 VS

TRANSTRACK LIMITED}....................................................................                                                                                                               RESPONDENT

BEFORE HON MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicant filed this application under section 99 of the Civil Procedure Act cap 71 and Order 52 rules 1, 2 and 3 of the Civil Procedure Rules for correction of error on page 18, paragraph 2 and 3 of the ruling in Miscellaneous Application number 608 of 2012 by replacing the sum of US$303,330.0 with the sum of US$405,375.45 and for costs of the application.

The grounds of the application as set out in the notice of motion are that on 22 February 2013 this court delivered a ruling in Miscellaneous Application No. 348 of 2012 where the judgment in HCCS No. 161 of 2010 was corrected by stating that the replacement value of the goods was not US$303,330.0 but the replacement value of the goods which the Applicant asserts is US$405,375.45. The Respondent subsequently filed an application for stay of execution in Miscellaneous Application Number 608 of 2012 wherein the court ordered the Respondent to furnish security for the due performance of the decree. The court mistakenly ordered that the Respondent furnishes to the satisfaction of the registrar, security deposit in the equivalent sum of US$303,330 instead of US$405,375.45. Consequently this was a proper case for the court to intervene and correct the judgment so as to reflect the true intention of the court and so that the Applicant does not suffer injustice. The application is supported by the affidavit of Alice Nalwoga of Messieurs Sebalu and Lule Advocates which substantially repeats the grounds averred in the notice of motion. This is to the effect that on 22 February 2013, the court held that the Respondent was liable to pay the full replacement value of the goods in accordance with clause 6.1 of the contract which is US$405,375.45 and the court rejected the Respondent’s assertion that it was US$303,330. Subsequently in Miscellaneous Application No. 608 of 2012 wherein the Respondent applied for stay of execution and on 16 August 2013 the court granted conditional stay of execution upon the Applicant furnishing security for due performance of the decree. The court mistakenly ordered the Respondent to furnish the equivalent of US$303,330 instead of US$405,375.45 in cash or equivalent security to the satisfaction of the registrar.

In opposition the Respondent filed an affidavit in reply deposed to by Wandera Michael in which he deposes that the Plaintiff in HCCS No. 161 of 2010 was awarded US$303,330.00 and US$45,500 as special damages and general damages respectively. The deponent denies the assertion of the Applicant contained in paragraph 4 of the affidavits in support of the application that the court held that the full replacement value of the lost goods was US$405,375.45. He asserts that the full replacement value of the goods is that the Plaintiff (and not the Applicant) had to be restored as nearly as possible to a position it would have been had there been no loss of the goods. According to him at page 8 and 9 of the ruling of the court in Miscellaneous Application No. 348 of 2012, the full replacement value was the market value of the lost goods at the place of delivery being US$303,330.00 plus a sum equivalent to 15%. So the assertion is that the full replacement value of the goods is US$303,330.00 plus a sum of US$45,500 (being the 15%) on top of it. The other depositions are inferences to the effect that the court was satisfied that the sum of US$303,330.00 was sufficient to secure the due performance of the Applicants obligation in the decree dated 23rd of February 2012.

Alternatively the Respondents deponent asserts that the court did not find the full replacement value of the goods to be US$405,375.45 and that the sum constituting the quantum of the full replacement value of the lost goods can be ascertained from the ruling in Miscellaneous Application No 608 of 2012 which is equivalent to US$348,829.50 only. Secondly the sum of US$303,330.00 constitutes 87% of the full replacement value of the lost goods and is sufficient security for the due performance of the decree.

At the hearing of the application, the Applicant was represented by Counsel Barnabas Tumusingize while the Respondent was represented by Counsel Frederick Mpanga.

Counsels refined the issues for trial by analysing the rulings. According to the Applicants Counsel the Respondent agrees that the amount shall be US$303,330 plus a sum of US$45,000 in paragraph 2 of the decree and an additional paragraph 3 which has 8% on special damages. If this was computed, the total figure would be US$391,295.7. This was purely a question of mathematics. Consequently the issue is whether item 4 in the decree is part of the replacement value (interest on items 1 and 2) constituting part of the replacement value. The answer as to whether the amount to be deposited shall be US$391,295.7 or as contended by the Applicant a sum of US$405,375.45 based on item 4 of the decree and which gives the total of US$405,375.4 is the only issue for determination by the court.

The Respondents Counsel added that the issue is whether items 1, 2, 3, and 4 of the decree constitute item number 5.

Ruling

I have carefully considered the Applicants application and the efforts of Counsel in sharpening the actual matter in controversy in this application.

My first observation is that the court does not need to determine issues of principle as to whether the sum of US$303,330 was sufficient security because it constitutes a certain percentage of the full decreed amount. From my understanding of the submissions and concessions of the parties, the task of the court is to determine whether writing of the sum of US$303,330 as security for due performance of the decree as may eventually be binding was an error. It is apparent that there was an error for the court to hold that the full replacement value of the goods was a sum of US$303,330.00 based on the ruling of the court in MA No. 348 of 2012 where the import of the phrase was determined.

Furthermore based on the interpretation of the decree by both counsels, there is a concessional and different position on the proper amount of security based on a mathematical computation of the decree according to addition of US$303,330 plus US$45,000 in paragraph 2 of the decree and plus paragraph 3 of the decree which awards 8% interest on the special damages to arrive at a figure of US$391,295.7.

The Respondents Counsel however expanded the issue by asking the court to consider whether items number 1, 2, 3 and 4 of the decree constitute item 5. I will first of all base my conclusions on the ruling of the court in Miscellaneous Application No. 348 of 2012 which had been filed by the Respondent against the Applicant for determination of the full replacement value of the goods. In that application the Respondent contended that the full replacement value of the goods was a sum of US$303,330.00 and the court determined what was meant in the decree. In that ruling I held that the court had determined at page 52 of the judgment that the loss of the Plaintiffs cargo is a loss envisaged by clause 6.1 of the contract and it followed that the carrier who is the third-party (the Respondent in this application) is responsible to the Applicant and any customer for the loss. Consequently it was determined that the Respondent was responsible to the Defendant and any customer for the loss. The court had not indicated the quantum of that liability. Between pages 8 and 9 of the ruling the court determined that the replacement value of the goods was US$303,330.00 together with the sum of 15% of the special damages. US$303,330.00 was the price at which the Plaintiff bought the goods in Uganda. The replacement value was the market value at the place of delivery less the cost of freight to the place of delivery.

In Miscellaneous Application No. 348 of 2012 the Respondent had applied for the correction of a specific item. In paragraph 1 of the notice of motion the Respondent clearly averred that the second line of the judgment in Civil Suit No. 161 of 2012 be corrected by inserting US$303,330.00 between the word "party" and the full stop. Secondly the Respondent sought an order for the decree to be corrected by inserting US$303,330.00 at the end of clause 5.

I have considered the decree and I only have one problem with it. The decree is extracted from the judgment in HCCS No. 161 of 2012 but does not reflect accurately the entire decision of the court on that matter.

In paragraph 1 the parties extracted a decree which agreed that the Defendant shall pay the Plaintiff a sum of US$303,330.00 as special damages. In paragraph 2 it was extracted and written that the Defendant shall pay the Plaintiff a sum of US$45,500 as general damages. In paragraph 3 it is written that the Defendant shall pay the Plaintiff interest at 8% per month on the special damages from May 2010 till the date of the judgment. In paragraph 4 of the decree it is written that the Defendant shall pay the Plaintiff interest at 6% per month on the decreed sums in items number 1 and 2 namely the special damages and 15% from the date of judgment till payment in full. Finally it is written that the third-party is liable to indemnify the Defendant for the full replacement value of the lost goods. The Respondents issue is whether the full replacement value includes the first 4 items in the decree.

That question requires an analysis of the judgment of the court in HCCS No 161 of 2010. The court already determined what was meant in the main judgment in H.C.M.A No 348 of 2012 which I shall quote in full between pages 8 and 10 and reads as follows:

“The fact that there is a controversy between the parties as to the quantum of the full replacement value of the goods lost while in the custody of the third-party, demonstrates without the need for further argument that the court had omitted to pronounce the quantum of the full replacement value of the goods. The Applicant’s application therefore has merit because Counsel for the Applicant submits that the quantum for the replacement value is US$303,330 while the Respondent maintains that the replacement value includes whatever it paid to the Plaintiff under the judgment of the court. I do not agree with the Applicant that the interpretation of the judgment is that the replacement value of the goods is US$303,330. It is clearly reflected in the judgment that the third-party is liable to indemnify the Defendant under clause 6.1 of the contract exhibit D1. The court indicates quite clearly that the third-party is liable to the customer of the Defendant as well under clause 6.1 quoted above. This is contained in page 52 of the judgment which I have quoted above. For emphasis the court held that the third-party is responsible to the Defendant and any customer.

In this case the customer is the Plaintiff, the owner of the goods which got lost. I have carefully considered the issue between the Plaintiff and the Defendant. The court determined the quantum of loss suffered by the Plaintiff. The issue which was submitted on by the parties as between the Plaintiff and the Defendant is as follows "What is the amount of loss suffered by the Plaintiff?" The court held that the doctrine that the courts have used in awarding damages is the principle of restitutio in integrum which is that the Plaintiff should be restored as nearly as possible to a position he or she would have been had the injury complained of not occurred. The court applied the principles upon which awards are made for loss of cargo following McGregor on Damages 15th edition page 681 paragraph 1101 that the normal measure of damages for non-delivery is the market value of the goods at the time and place at which they should have been delivered less the amount it would have cost to get them into the place of delivery. At page 36 the court held that the place of delivery was Vietnam and the market value to be taken is the contract place of delivery by the carrier and not the place where the goods were delivered to the carrier. The court was explicit that the Plaintiff was entitled to 15% above the price of purchase of the goods which was US$303,330. If the question had been asked as to how much the third-party would have indemnified the Plaintiff, the answer would be as much as what has been awarded against the Defendant. That is because the 3^rd party is liable to the Defendant’s customer as well. This flows from the interpretation of clause 6.1 of the contract coupled with 6.5. Following the judgment of the court at pages 36 and 37 it is clearly the case that the court decided that the replacement value of the goods is at the place of contractual delivery of the goods and at the market value. The market value included the 15% additional to the price of purchase of the goods. For emphasis clause 6.1 as far as is relevant to the question of liability of the third-party to the Plaintiff or the Defendant provides as follows: "indemnify Maersk Logistics and any customer for any and all responsibility and liability arising out of such loss, damage or delay." In other words under clause 6.1 the third-party had all responsibility and liability arising out of such loss, damage or delay. The words "full replacement value of any goods" should be read to mean the replacement of the goods of the Plaintiff. The goods did not belong to the Defendant in the first place. The Defendant was contracted to convey the goods to Vietnam which is the place of contractual delivery of the goods. The goods could only be replaced for the benefit of the Plaintiff. It therefore follows that the full replacement value of the goods was ordered against the Defendant by way of a judgment is that the Plaintiff had to be restored as nearly as possible to a position it would have been in had the loss not occurred” (Emphasis in bold added).

From the ruling extracted above the court determined that the third-party was liable to indemnify the Plaintiff for all responsibility and liability arising out of the loss, damage or delay as envisaged in clause 6.1 of the relevant contract considered and that should be read to mean the replacement value of the goods. In other words item 5 of the decree should be read to include the interest decreed against the Defendant for the benefit of the Plaintiff arising from the delay in replacement of the goods (value of the goods).

The answer to the question of the Respondents Counsel is reflected in the previous ruling to the effect that the goods are replaced for the benefit of the Plaintiff. The court awarded special damages of US$303,330.00 and an additional sum of 15% reflecting US$45,500. Furthermore the sums awarded and reflected in paragraphs 1 and 2 of the decree attracted interest at 8% per annum from May 2010 till the date of judgment. It was clearly meant to compensate the Plaintiff for the period of delay without realising its money. It is therefore incorporated in the meaning of the “replacement value of the goods”.

Lastly interest of 6% per annum on decreed sums is statutory. So long as from the date of judgment no payment has been made, liability of the person responsible for items 1, 2, 3 and 4 will attract interest at 6% per annum from the date of judgment till payment in full under section 26 (3) of the Civil Procedure Act where the decree is silent on the interest payable. In this case the court had awarded interest at 6% per annum on the decreed sums to run from the date of the decree/judgment.

In those circumstances the Applicant's application succeeds. The court in effect determined that the Respondent was liable for the judgment against the Defendant save for the question of costs. I will not however venture to calculate the exact amount this totals to. It suffices for the court to hold that the “replacement value” as embodied in item 5 of the decree includes items number 1, 2, 3 and 4. Item number 5 of the decree was an extraction of the Counsels. But a reading of the entire judgment indicates that the third-party is liable for all liability caused by loss and delay under clause 6.1 of the contract and as reflected in the extraction of my ruling in Miscellaneous Application Number 348 of 2012. I cannot add anything to the said ruling as the court is functus officio when it determined what the phrase "replacement value of the goods" represented.

In those circumstances the quantum of security deposit ordered in Miscellaneous Application No. 608 of 2012 shall be corrected to reflect the "replacement value of the goods" as interpreted in HCMA 348 of 2012. Security for due performance of the decree can be calculated by the honourable registrar and the issue is accordingly referred to the Deputy Registrar for calculation only. There is not order as to costs

Ruling delivered in open court on 19^th December 2013 at 2:30 PM

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Frederick Mpanga appearing with Dan Wegulo for the Respondent

Michael Mafabi holding brief for Barnabas Tumusingize for the Applicant

No officials from the parties

Charles Okuni: Court Clerk

Christopher Madrama Izama

Judge

19/12/2013