SBI International Holdings AG (U) Ltd v COF International Company Ltd (Civil Appeal 14 of 2020) [2025] UGSC 15 (3 April 2025)

THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CIVIL APPEAL NO. 014 OF 2018 SBI INTERNATIONAL HOLDINGS AG (U) LTD:::::::::APPELLANT VERSUS COF INTERNATIONAL COMPANY LTD: : : : : : : : : : : : : : :RESPONDENT (Appeal from the decision of the Court of Appeal (Kasule, Kakuru and Obura, IJA) in Civil Appeal No. 194 of2014 dated 2id May, 2018) CORAM: HON. LADYIUSTICE PERCY NIGHTTUHAISE, JSC HON. MR. JUSTICE MIKE CHIBITA, JSC HON. LADYJUSTICE ELIZABETH MUSOKE, JSC HON. MR. JUSTICE STEPHEN MUSOTA, JSC HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA, JSC JUDGMENT OF ELIZABETH MUSOKE, JSC This appeal is from the decision of the Court of Appeal (Kasule, Kakuru, and Obura, JJA) in CivilAppeal No. 194 of 2014 dated 23'd May,2018. Background The respondent sued the appellant In the High Court claiming fraud and breach of contract, and sought special, general and punitive damages, interest and costs. The appellant denied the respondent's claims and prayed for dismissal of the suit. The appellant also counter-claimed for breach of contract by the respondent and sought general damages and costs. The facts of the case are briefly that by an agreement dated 4th April, 2006, the appellant contracted the respondent to construct lined drains in grouted stone pitching for a section of road sltuated in Bwera, Kasese District, at a price of Ug. Shs. 18,000/= per sq. metre of road constructed, and payable according to terms set out in the agreement. The agreement also stipulated that the appellant would supply diesel at a price of Ug. Shs. 1850/= per litre and cement at a prlce of Ug. Shs. 19,400/= per bag for use by the 1, respondent in the project. The respondent claimed, in lts suit, that it was underpaid by the appellant yet it executed the relevant works in accordance with the relevant contract and sought for special damages representing the difference between the amount rightly due to it and the underpaid amount. The respondent also claimed that the appellant charged higher prices for the cement and diesel supplied than the rate agreed upon in the parties' contract. The appellant denied the respondent's claim and averred that the respondent was paid what was due to lt under the agreement as per approved certificates showing the work done and amount payable. The appellant also claimed that the charging of higher prices for diesel and cement was justified by market fluctuations in the prices for the same. The appellant also counter- claimed for breach of contract arising from the respondent's failure to complete the construction works within the agreed timeframes, which clalm was denied by the respondent. The High Court allowed the respondent's claim and found that the appellant had underpaid it to the tune of Ug. Shs. 208,186,L201= which sum was awarded as special damages. The High Court also awarded general damages of Ug. Shs. 40,000,000/= and punitive damages of Ug. Shs. 30,000,000/=, interest on the comblned award of damages at 10% per annum from the date of judgment till payment in full, and costs. The appellant's counter- claim was also dismissed with costs. The appellant appealed to the Court of Appeal but was unsuccessful, hence this further appeal to this Court. The grounds of appeal are as follows: "(1) The Learned Justices of the Court of Appeal erred in law and fact when they failed to reappraise themselves of the evidence on record and make independent findings which resulted into dismissing the Appellant's Appeal. (2) The Learned Justices of the Court of Appeal erred in law and fact when they upheld the decision of the Trial Court awarding the Respondent Special damages of Ug. Shs. 208,186,120 without specific proof. 2 (3) The Learned Justices of the Court of Appeal erred in taw and fact when they found that the Appellant was in breach of the contract executed with the Respondent, (4) The Learned Justices of the Court of Appeal erred in law and fact when they found that the Respondent is entitled to Generai damages of Ug. Shs.40,000,000/= and punitive damages of Ug, Shs. 30,000,000/=. (5) The Learned Justices of the Court of Appeal erred in law and fact when they held that the Respondent was not estopped from making fudher claims against the Appellant after it had received payment in full and final settlement of all its claims and undertook not to make any further claims against the Appellant. (6) The Learned Justices of the Court of Appeal erred in Iaw and fact when they found that the Respondent is entitled to interest on the decretal sums at 10olo per annum from the date of judgment." The appellant prayed this Court for orders that: 'i) The appeal be ailowed. ii) The decision of the Court of Appeal be set aside. iii) The appellant be granted the costs ofthe appeal and in the Courts below." The respondent opposed the appeal. Representation At the hearing, Mr. Isaac Walukagga and Mr. Raymond Ndyagambaki, both learned counsel, jointly appeared for the Appellant. Mr. Caleb Alaka learned counsel, appeared for the respondent. Appellant's submissions Counsel for the appellant argued the grounds of appeal in the followlng order; grounds 1, 2 and 3 jointly, followed respectively by each of grounds 5, 4 and 6, independently. 3 Grounds 1, 2 and 3 The key point made by counsel in the submissions on grounds 1, 2 and 3 is that the Court of Appeal, in several respects, failed to properly reappraise the evidence as required by law, and as a result it arrived at the wrong decision of upholding the judgment of the trial Court. In the first respect, counsel submitted that the evidence adduced at the trial showed that the appellant duly paid the respondent for the work done, in accordance with the pafties'agreement. Counsel pointed out that the parties agreed that the respondent would be paid Ug. Shs, 18,000/- per sq. metre of stone-pitching work done. Further, that according to Exhibit D2, a report showing the work done by the respondent, the actual stone-pitching work done measured 6,544.67 sq. metres, which, in light of the parties'agreement entitled the respondent to payment of Ug. Shs. 117,804,0601-. Counsel pointed out that the appellant paid the respondent for 7272 sq. metres of stone-pitching work at an amount of Ug.Shs. L30,907,3401= which indlcated an over payment. In those circumstances, according to counsel, the respondent was not entitled to any further payment. Counsel faulted the Court of Appeal for failing to properly reappraise the evidence leading it to erroneously upholding the decislon of the trial Court yet the learned trial Judge ignored the above-highlighted evidence while arriving at his decislon. In the second respect, counsel submitted that the Court of Appeal failed to reappraise the evidence in regard to the respondent's claims that the appellant had refused to pay for certain extra works it carried out, namely works pinpointed in certificates tendered in evidence as Exhibits P1 (b) (i) - (vi). According to counsel, the trial Court ordered a re-measurement of the amount of work done by the respondent, with the results from this exercise captured in Exhibit D2 showing that the respondent did less work done was paid for. Thirdly, counsel submitted that the Court of Appeal failed to reappraise the evidence showing that the respondent did not, in its pleadlngs, set out the basis for computation of the amount claimed for the extra works. He submitted that the claims for extra works for items llke cast concrete to 4 foundation base, demobilization expenses and accumulated incorrect quantities were not pleaded and neither did the respondent adduce evidence to prove the same. In addition, counsel submitted that the parties' binding agreement did not provide for payment for extra works, and thus in allowing the respondent's claims, the lower Courts contravened the principle that parties are bound by their agreements and cannot be allowed to depart therefrom. For this proposition, counsel relied on Access Financia! Seruices PLC Ltd vs. Rutiba, High Court Civil Suit No. 61 of 2OO7 (unreported), where the Court refused to allow a party to succeed on a case that departed from her pleadings. Counsel concluded his submissions on grounds 1, 2 and 3 by submitting that the award of special damages of Ug. Shs. 208,t86,1201- by the trial Court that was upheld by the Court of Appeal was erroneous as the respondent neither specifically pleaded nor proved the said damages. Fufther that, the decision awarding special damages was against the weight of the evidence on record. Counsel submltted that ground l, 2 and3 ought to succeed. Ground 5 In support of ground 5, counsel submitted that prior to the respondent instituting the suit in the trial Court, the pafties had executed Exhibit D3 in which the respondent undertook not to make further claims against the appellant, in connection with the stone-pitching project. In counsel's view, the undertaking estopped the respondent from making the claims which formed the basis of the special damages awarded to it. Counsel relied on Stanbic Bank Uganda Ltd vs. Uganda Crocs Ltd, Supreme Court Civil Appeal No. O4 of 2004 (unreported) for the principles on estoppel. Counsel contended that the lower Courts refused to consider the evidence of the undeftaking which resulted in their erroneous decisions to award damages to the respondent. Counsel submitted that ground 5 should also succeed. 5 Ground 4 Counsel submitted that the Court of Appeal failed to reappraise the relevant evidence and consequently reached an erroneous decision to uphold the trlal Court's respective awards to the respondent of Ug. Shs. 40,000,000/= and Ug. Shs. 30,000,000/- as general and punitive damages, respectively. Counsel submitted that the evidence did not support the trial Court's findings of two instances of breach of contract that formed the basis of the award of damages, namely; 1) failure to pay the respondent for certain works; and 2) unlawful variation of fuel and cement prlces. In relatlon to the failure to pay for certaln works, counsel contended that Exhibit D2, a report tendered in evidence showed that the respondent was not only duly paid but was overpaid for some of the work done. With regard to the variation of fuel and cement prices, counsel submitted that the respondent was supplied fuel and cement at prices which it accepted. Therefore, according to counsel there was no loss suffered by the respondent to justify the damages awarded to it. Fufthermore, counsel submitted that the award of general damages of Ug. Shs. 40,000,000/= was excessive and served more than just compensating the respondent since it had already been awarded U9. Shs. 208,186,7201- as special damages, Further still, and in relation to the award of punitive damages, counsel submitted that the Court of Appeal erred in upholding the trial Couft's award of punitive damages yet the principles for awarding that class of damages, as set out in Omunyokol Akol Johnson vs. Attorney General, Supreme Court Civil Appeal No 6 of 2O12 (unreported) were not satisfied in thls case. In Omunyokol Akol Johnson (supra), it was held that punitive damages may be awarded only in the following cases: '1) Where the government servants had been guilty of oppressive, arbitrary or unconstitutional action. 2) Where the defendant's conduct had been calculated by him to make a profit for himself which may exceed the compensation payable to the plaintiff. 6 3) Where such an award was sanctioned by statute." Counsel thus contended that the circumstances of this case did not justify an award of punitive damages. Counsel submitted that the respondent adduced no evidence justifuing the award of general damages and thus the Court of Appeal erred in upholding the trial Court's award of general damages. Counsel submitted that ground 4 of the appeal also ought to succeed. Ground 6 Counsel for the respondent argued the grounds in the same manner as his colleagues for the appellant. Grounds L,2and3 Counsel for the respondent submitted that the lower Courts properly considered the pleadings and adequately evaluated the evidence on breach of contract before finding in favour of the respondent. The High Court considered thatthe appellant had breached the contract with the respondent by: 1) unilaterally increasing the price of cement and fuel over the prices agreed upon in the contract; and 2) retaining some of the money owing to the respondent yet the contract did not provide for retention. The Court of Appeal after re-evaluating the evidence found that the appellant had breached the contract by; 1) failing to pay the respondent for additional works it had done in accordance with a work plan authorized by their 1 Counsel submitted that the Court of Appeal erred in upholding the trial Court's award of interest of l0o/o on the decretal sums awarded to the respondent because in his view: 1) the respondent was not kept out of any money to justify awarding interest; and 2) the rate of interest was manifestly excessive and a fair rate should have been 6010. Counsel submitted that Couft finds that ground 6 ought to succeed. Respondent's submissions contrac! and 2) unilaterally increasing the price of cement and diesel to the detriment of the respondent. With regard to the appellant's submission that the respondent was duly paid for all the work done as set out in Exhibit D2, a repoft of work done by the respondent, counsel submltted that the Court of Appeal declined to rely on Exhibit D2 because its author was just a student pursuing and not an engineer and was therefore not competent to give evidence on the work done by the respondent. In relation to the submission that the Court of Appeal erred in upholding the trial Court's award of Ug. Shs. 208,186,123 to the respondent as special damages, counsel submitted that the said award was justified given that the respondent specifically pleaded and strictly proved its claim for special damages. According to counsel, the respondent led evidence to prove the respective heads for which special damages were claimed. Counsel concluded by submitting that grounds l, 2 and 3 ought to fail. Ground 5 Counsel concluded by submitting that ground 5 should also fail. Grounds 4 and 6 With respect to grounds 4 and 6, counsel submitted that the Court of Appeal applied the correct principles as set out in Bholm vs. Car and General Ltd, Supreme Court Civil Appeal No. 12 of 2OO2 (unreported), in upholding the trial Court's award of Ug, Shs. 40,000,0007= 1o the respondent as general damages. In the Bholm case (supra), it was held that: 8 Counsel submitted that ground 5 should not be entertained as it is raising a new point that the appellant did not raise before the Court of Appeal. Furthermore, counsel submitted that Exhibit D3 applied only to the breach relating to retention money and not the entire claim against the appellant as submitted by counsel for the appellant, "An appellate Court will not reverse a judgment, or part of a judgment of a Court below on a question of damages unless the appellate court is satisfied that the judge acted on a wrong principle or that the amount awarded was so extremely large or so very small as to make it an entirely erroneous estimate of the damage." According to counsel, as the Court of Appeal found no reason to interfere with the award of general damages, it rightly upheld the same. On the award of punltive damages, counsel submitted that the Court of Appeal correctly applied that the principle set out in Omunyokol Akol Johnson vs. Attorney General, Supreme Court Civil Appeal No. 6 of 2012 (unreported) that punitive damages may be awarded, "...where the defendant's conduct had been calculated by him to make a profit for himself which may exceed the compensation payable to the plaintiff." Counsel contended that the respondent was a victim of conduct by which the respondent sought to make a profit and accordlng punitive damages were appropriate. He prayed that grounds 4 and 6 also be disallowed. Ground 6 On ground 6, counsel submitted that interest of 100/o was fair and there was no compelling reason for the Court of Appeal to interfere. He urged this Court to disallow ground 6. Consideration of the Appeal I have carefully studied the record, and considered the submissions of the respective counsel, as well as the law and authorities cited. I have also considered other applicable authoritles that were not cited. This is a second appeal from a decision of the Court of Appeal that affirmed a decision rendered by the High Court in exercise of its originaljurisdiction. I shall begin by setting out the main principles governing the exercise of this Court's jurisdiction in second appeals. Rule 3O (1) of the Judicature (Supreme Court Rules) Directions, SI 13-10 provides that: 9 "30. Power to reappraise evidence (1) Where the Court of Appeal has reverced, affirmed or varied a decision of the High Court acting in its original jurisdiction, the court may decide matters of law or mixed law and fact, but shall not have discretion to take additaonal evidence." It is now well-established from the case law that, on second appeals, this Court will consider the points of law presented for determination, but will not ordinarily reappraise the evidence unless exceptional circumstances justiflT its doing so. In Goustar Enterprises Ltd vs. John Kokas Oumo, Supreme Court Civil Appeal No. O8 of 2OO3 (unreported), this Court held that: "...as a second appellate court, except in the clearest of cases, we are not required to re-evaluate the evidence like a first appellate Court. However, we stated in the case of Kifamunte Henry vs. Uganda Cr, Appeal No. 10 of 1997 that where the Court of Appeal has failed to do so or has applied wrong principles as in that case, we must correct any errors committed." In the Goustar Enterprises Ltd case (supra), the Court gave examples of exceptional circumstances justin/ing reappraisal of evidence to include: I shall bear the above principles in mind as I consider the grounds of appeal. I shall consider the grounds in the following manner: first, grounds l, 2 and 3 jolntly, followed by grounds 4 and 6 jointly, and lastly, ground 5 independently. Grounds 1,2 and 3 The main point made in counsel for the appellant's submissions on grounds I, 2 and 3 is that the Court of Appeal's decision to uphold the trial Court's award of Ug. Shs. 208,186,1231= as special damages to the respondent was 10 "...where it is apparent that the evidence on record has not been subjected to adequate scrutiny by the trial Judge or the first appellate Court, as the case may be, the appellate Court has an obligation to do so." unjustified because of two main reasons: 1) the appellant did not owe the respondent any money, and instead the evldence showed that the appellant paid more than was due to the respondent under the parties'contract; 2) the respondent did not prove lts claim for unpaid works which constituted part of the special damages awarded by the learned trial Judge. The Court of Appeal did not address the above-highlighted points despite the appellant having raised them before it, which, in my view, amounted to failure by the Court of Appeal to exercise its duty to reappraise the evidence and make its own conclusions. I shall, therefore, proceed to re-evaluate the evidence so as to address these points. The respondent averred at paras 5 to 9 of lts 2nd amended plaint, as follows: 5 The plaintiff shall aver and prove that the amounts of works executed on behalf of the defendant and as per the contract formulae ol 2.32 m2 under all the 6 interim certificates i.e No. llL9i 2l2O; 3l2L; 4122i 5123 & 5/24 totals to 11,223.59 m2 and other works equiyalent to Ugx. 324,936,8001=. The plaintiff was only paid for total works under Cert. No. 1 & 3 measuring 3799.25 m2 exclusive of diesel and cement sold worth Ugx. 28,468,064/- together with the advanced Ugx. 4,000,000/= totaling to Ugx. 32,468,0641= which constitutes just only 9.7.45o/o ofthe plaintiff's executed works under the project, The plaintiff shall aver and prove that, for all the works it executed, the defendant was fully paid 100o/o of 11,234.91 m2at LOL,TLO per m2 worth Ugx. L,L42,7O2,696/= and the defendant ought to have been pleased enough to pay the plaintiff what was due to her, which she did not. The plaintiff shall further aver and prove that later discovery disclosed precisely quantities in para 7 a bove, the defendant's IPC. No. 19-26, it was discovered that RAFU had certified and 100o/o fully paid works invoiced by the defendant in the categories of 1232.18 m2for Cert No.1; 1620.51 m2for Cert No.2; 2001.71 m2 for Cert No.3; 805.90 m2 for Cert No.4; 1414,61 m2 for Cert No.s; 2212.69 m2for Cert. No, 6; 1571.32m21or Cert. No. 25 and 375.A4 11 6 8 7. m2 for Cert. No. 26 respectively, which altogether total to LL,234.9 I m 2 at U gx. LOl,7 LO | = tota I i ng to U gx. L,142,7 O2,9 69 | = whereas the plaintiff only receaved Ugx. 32,468,064/= frqm 16. defendant. The plaintiff shall aver and prove that the defendant calculated to negative deficits and never attempted to pay off amounts invoiced and due under Certs, No. 2,4, 5 and 6, save for Ce*s. No, 1 and 3 which were incorrectly calculated and paid creating a wrong impression that the defendant owes the plaintiff nothing." The appellant disputed the above clalms and contended at para 5 of its written statement of defence that: "The defendant shall further aver that its dealings with the Road Agency Formation Unit have no bearing on the plaintiff's claim and/or works in light of the sub-contract aforementioned." I noted that prior to institution of the respondent's suit, the appellant had computed that the respondent carried out 7272.63 m2 of stone-pitching works (See: Interim Certificate No. 6). But as set out earlier, the respondent's case was that it carried out stone-pitching work measuring tL,234.91 m2. The question that immediately arises is whether or not the respondent proved that it carried out stone pitching work covering 11,234.9t m2. PW1 Okot Olum Charles, the respondent's Managing Director testified in support of the respondent's case. He stated that the respondent did more work than was recorded by the appellant in the interim payment certificates Nos. 2 to 6. The amount of work actually done by the respondent and the amount for which the appellant paid are summarised in the table below: Interim Certificate No. Work actually done (A) (m2) Work certified by the Appellant (BXm') Difference (A-B) (m') No. 1 t420.8 1420.8 Nil No.2 2277,67 7777.72 933.89 12 9 No.3 2683.85 2378.45 305.4 No.4 2326 868 1458 No.5 672.3 600 72.3 No.6 808.54 727.63 80.91 TOTAL 8,707.45 7277.63 t428.82 I further noted that PW1 also testified, at page 90 of the record, that in total, the amount of work done by the respondent that remained unpaid measured BB83,B1 m2. At the price of Ug, Shs. 18,000 per sq. metre, this represented Ug, Shs. 159,908,580/-. However, as indicated in the above table, the correct computation of the amount of work done as per PW1's evidence was 8,701.45 m2 translatlng to Ug. Shs. 156,626,1001-. PW1 stated in cross-examination that the appellant prepared fraudulent ceftificates wherein it indicated less work than had actually been done by the respondent. In a passage at page 134 of the record, PWl stated as follows: "Walukaga: Do you confirm that such ceftificates covered the works you had done? PW1: No, they didn't cover the works we had done, they were fraudulently reduced to smaller quantities that we did. Certificates passes were issued by the client's representatives handed it over to the defendant, the defendant on receipt of those certified work hid them under their confidential custody." PW1 therefore gave oral evidence of the existence of other invoices prepared by the project client that set out the correct amount of work done by the respondent/ and that the correct amount was more than was certified and paid for by the appellant. However, it will be noted that the invoices prepared by the project client were not tendered in evidence and this made it difficult to verify PW1's oral evidence, 13 I further noted another dimension of PWl's evidence which was that the respondent carried out extra works but was not allowed to make an invoice for the same. PW1 testified that the respondent did demolition and repitching works on dralns on the road leading to Katwe Army Barracks at a cost of Ug. Shs. 8,108,480/= and Ug. Shs. 5,497,0001- respectively, but was not paid for this work by the appellant. Therefore, according to my analysis of PW1's evidence, the total amount of money, without deducting the cost of the cement and diesel supplied by the appellant, that remained unpaid to the respondent (for invoiced and un- invoiced work) was Ug. Shs. 170,231,5801-. However, regarding the respondent's claim for unpaid work, the learned trial Judge found that: "In this case, the Plaintiff led evidence to prove special damages as pleaded in his plaint and I allow the same at Ug. Shs. 2O8,L86,L2O|= (Uganda Shillings Two Hundred Eight Million One Hundred Eighty-Six Thousand One Hundred Twenty Shillings Only." The learned trial Judge made no attempt In hls judgment to analyze the evidence that led him into concluding that the respondent had proved the quantum of special damages that it was awarded. He only made the summary findings set out above. I have therefore reappraised the evidence in order to establish whether the respondent proved his case for unpaid works, and if so whether the amount of money he was entitled to was to the tune awarded by the lower courts or less. I earlier referred to the respondent's pleadings with respect to its claim for special damages and to the key evidence of PW1 in support of the respondent's claim for special damages, which PW1 stated comprised of unpaid invoiced and un-invoiced work. It is worth reiterating that special damages are such damages as the law will not presume to be the consequences ofthe defendant's act. Such damages depend in part, at least, on the special circumstances of the case and must therefore always be explicitly claimed in the pleadings and, at trial, must be proved by evidence proving both that the loss was incurred and that it was the direct result of the defendant's conduct. See: Musoke v Depafted Asians' Propefi Custodian Board and another [199O-1994] 1 EA 419 quoting from 1,4 Odger's Principles of Pleading and Practice (21 ed.). Further, in relation to pleading and proof of special damages, this Couft held in the case of Mutekanga v Equator Growers (U) Ltd [1995-1998] 2 EA 219 as follows: "Again, it is trite law that special damages and loss of profit must be specifically pleaded, as it was done in the instant case. They must also be proved exactly, that is to say, on the balance of probabilities. This rule applies where a suit proceeds inter partes or ex parte. It follows that even where as in the instant case, the defendant neither enters appearance nor files a defence, the plaintiff bears the burden to prove his case to the required standard. The burden and standard of proof does not become any less. As the learned author stated in MC Gregor on Damages (4 ed) at 1028, the evidence in special damages must show the same particularity as is necessary from its pleading. It should therefore, normatly consist of evidence of particular losses such as the loss of specific customers or specific contracts. However, with proof as with pleadings, the Courts are realistic and accept that the particularity must be tailored to the facts. In one of the leading cases on pleading and proof of damages, namely, Ratcliffe v Evans [1892] 2 QB 524, Bowden lJ, said this at 532-533: "The character of the acts themselves which produce the damage, and the circumstances under which these acts are done must regulate the degree of certainty and particularity with which the damage ought to be proved, As such, certainty must be insisted on in proof of damage as is reasonable, having regard to the circumstances and the nature of the acts themselves by which the damage is done, To insist upon less would be to relax old and intelligible principles. To insist upon mone would be the vainest pandatory," In the present case, the evidence in support of the amount of money claimed by the respondent as special damages emerged only in the oral evidence of PW1. I have reviewed PWl's evidence and, for the reasons that will follow, I am not satisfied that that evidence assisted the respondent to prove its claim for special damages to a satisfactory standard. 15 16 First, the oral evidence of PW1 was difficult to verify. In Armagas Ltd v Mundogas SA (The Ocean Frost) [1985] 1 LIoyd's Rep 1 (per Lord Justice GofF) lt was held that: "Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in pafticular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of vely great assistance to a Judge in ascertaining the truth." I agree with the above principles. In the present case, there were neither objective facts independent of PW1's oral testimony nor contemporaneous documents proving the respondent's claim for special damages. I noted PW1's evidence that the project client had prepared Invoices that correctly set out the amount of work done by the respondent, but these were not adduced in evidence. For these reasons, I would find that the oral evidence of PWl was insufficient to prove the respondent's case. Secondly, PW1's pleadings and evidence set out different sums in relation to the amount of unpaid work done by the respondent; 11,234.91 m2 according to the pleadings; and 8883.81 m2 plus other un-invoiced work according to PW1's evldence. Thirdly, the payment certificates that were prepared by the appellant but also endorsed by the respondent indicated that it had carrled out works measuring 7272.63 m2 Fourthly, there was evidence given by DW1 Kasiita A. Mustafa that the trial Court commissioned a survey to investlgate the amount of work done by the respondent and the findings were set out In Exhibit D2 which concluded that the total amount of work done by the respondent was 6544.67 m2 The report was not seriously challenged in cross examination. However, I noted that the learned trial Judge in his judgment doubted DW1's expertise and competence to prepare the report, He stated as follows: "Although the defendant company employed him as an expert, he was surely not one as he was merely pursuing a Diploma course in the field he was employed as an expert. To rely on his evidence or expertise he does not possess would surely be misleading this Court." In my view, the contents of Exhibit D2 could not, in the circumstances of this case, be doubted. The report was produced following a survey that was ordered by the trlal Court, and was the joint work of representatives of both the appellant and the respondent, that is DW1 for the appellant and Mr. Nicholas E. Oder for the respondent. DW1's competence was not challenged at the trial and thus the learned trial Judge's findings that he was not an expeft had no basis. I would believe Exhibit D2 as rendering it highly probable that the amount of work done by the respondent was less than the appellant actually paid for. This further complicated the prospects of success of the respondent's case. The other aspect of the respondent's case was that the appellant unilaterally inflated the prices of diesel and cement contrary to the paties'contract. The parties had agreed in their contract that the appellant would supply the respondent with diesel and cement as required for the stone pitching works at the price of Ug. Shs. 1850 per litre of diesel and Ug. Shs. 19,4001= per bag of cement. The interim payment certificates Nos. 2, 3, 4, 5 and 6 all indicated that the appellant charged a hlgher price than agreed in the contract of Ug. Shs. 20501- (excess of Ug. Shs. 2001-) for diesel and Ug. Shs. 19500/= (excess of Ug. Shs. 100/=; for cement. PW1 testified that the respondent suffered a loss of Ug. Shs. 2,445,9001- arlsing from being charged more for diesel and cement than it ought to have been charged. The respondent's reason for charging increased prices for diesel and cement according to the testimony of DWl was that there had been a fluctuation in the prices of diesel and cement which necessitated the charging of higher prices. However, the parties' contract anticipated the charging of a fixed price for cement and diesel by the appellant and did not give allowance for charging of a higher price because of price fluctuation. This claim for 17 charging of increased prices for cement and diesel contrary to the parties contract therefore had merit. owing to the above analysis, I would accept the submission of counsel for the appellant that the respondent did not prove its case for unpaid works against the appellant and was not entitled to the special damages it pleaded. Grounds 1 and 2 would therefore succeed. Ground 3 would also largely succeed but would fail to the extent that the appellant acted in breach of contract by supplying diesel and cement at higher prices than was agreed in the parties'contract causing the respondent loss to the tune of Ug. Shs. 2,499,000/-. Grounds 4 and 6 Ground 4 challenges the trial court's respective awards to the respondent of Ug. Shs. 40,000,000/= as special damages and Ug. Shs. 30,000,000/- as punitive damages, that were upheld by the Court of Appeal. Ground 6 challenges the award of interest by the trial court. Having earlier found that the respondent did not prove its case for unpaid works against the appellant, it would follow that the awards of general and punitive damages and interest against the appellants must be set aside. Grounds 4 and 6 would also succeed, Ground 5 I need not consider ground 5 because, the appellant having succeeded on grounds I, 2, 3, 4 and 6, is sufficient to dispose of the appeal. In conclusion, I would allow the appeal and make the following orders: a) The respective decisions of the Court of Appeal and High Court are set aside. b) The respondent's suit in the High Court substantially fails and only succeeds with respect to the claim that the appellant unlawfully charged higher prices of diesel and cement than was agreed in the parties, contract. 18 c) The appellant shall pay the respondent Ug. Shs. 2,499,0001= for loss suffered due to the charging of higher prices of fuel and diesel. d) The amount in (c) shall attract interest at Bolo per annum from the date of filing of the respondent's suit in the trial Court till payment in full. e) The appellant shall be paid 3/+ of the total costs of this appeal and in the courts below. 3"4 t Dated at Kampala this day of ......2025. Elizabeth Musoke Justice of the Supreme Court 19 5 THE REPUBLIC OF UGANDA, IN THE SUPREME COURT OF UGANDA AT KAMPALA (CORAM:TUHAISE, CHIBITA, MUSOKE, MUSOTA, MADRAMA, JJSC) CIVIL APPEAL NO 014 OF 2018 SBI INTERNATIONAL COMPANY LTD} APPELLANT VERSUS coF TNTERNATIONAL CoMPANY LTD) RESPONDENT (Appeat against the decision of the Court of Appeal in Court of Appeal Civil Appeal No. 194 of 2014 dated 27 May 2018 before (Kasule, Kakuru and Obura, JJA) JUDGMENT OF CHRISTOPHER MADRAMA IZAMA. JSC I have reviewed the draft judgment prepared by my learned sister, Musoke, JSC, which comprehensivel.y outtines the facts, issues, and arguments presented by counset. I find it unnecessary to rerterate these, as my learned sister has adequatety addressed them. The crux of the judgment is that the conclusions of the lower courts regarding the extent of work performed by the pl.aintiff/respondent in this appeal. are not supported by credibte evidence, given the evidence reviewed. lndeed, the evidence on record supports the appetLant's defense, and such an issue is considered a matter of [aw. The taw is that a conctusion lacking credibte evidentiary support is tegatty untenabte and witt be set aside. I wish to emphasize that the factuat dispute concerning the amount of work compLeted by the respondent, which formed the basis for their ctaim for damages, necessitates further observation in addition to the Lead judgment's anatysis of how the court sought to resolve this controversy. The appeal. record ctearty indicates that PWl testified regarding the court- commissioned joint expert measurement of the totaI work compteted by the ptaintiff, incLuding the ptaintiff's experts' participation. PWI confirmed that 15 20 25 30 1 10 the court ordered the measurement, and the ptaintiff participated in this joint effort. The centrat factuaL dispute revolved around whether the work covered 7,272.63 m' or, as stated in the joint report, 6'51+4 66'l m' PWl attempted to dispute the joint report by stating that the report was not according to the court's terms of reference. 0n the other hand, DWl testif ied that the court directed him to conduct a joint measurement survey with a quantity surveyor representing the ptaintiff to verify the measurements of the executed works. DW1 compl.eted the joint survey, and they determined the totat measurement of the work done to be 6,544.67 m', of grouted stone pitching, which was to be muttipl'ied by Uganda shittings 18,000/=' I note that court-ordered inquiries or trials are conducted under the Judicature Act, Cap 13, 2000 Laws of Uganda, specificatty sections 26 and 27 (prior to the 2023 revision). I wil.t refer to the sections before revision and at the time of the proceedings. NotabLy, the initiat proceedings involving a pretriaL conference and order of reference were before a different judge. The scheduLing conference notes and the order of reference are not on record. Each party catted one witness, PW1 and DW1, respectivety. The examination of these witnesses occurred before yet another judge, different from the one who ordered the joint team measurement. lt can be inferred from the facts and Law that reference proceedings fatl under sections 26 or 27 of the Judicature Act, which stiputate: 10 15 20 25 30 26. References to referees. (1) The High court may, in accordance with rutes of court, refer to an official or special referee for inquiry and report any question arising in any cause or matter, other than in a criminal proceeding. (2) The report of an officiaL or special referee may be adopted whoLty or partly by the High court and if so adopted may be enforced as a judgment or order of the High Court. 27.frial by referee or arbitrator. Where in any cause or matter, other than a criminal proceeding- (a) att the parties interested who are not under disabiLity consent; 2 35 (b) the cause or matter requires any prolonged examination of documents or any scientific or Lega[ investigation which cannot, in the opinion of the High court, convenientty be conducted by the High Court through its ordinary officers; or (c) the question in dispute consists wholly or partly of accounts, the High Court may, at any time, order the whole cause or matter or any question of fact arising in it to be tried before a speciaI referee or arbitrator agreed to by the parties or before an officiaI referee or an officer of the High Court. A court-ordered inquiry and report on a question arising in a cause or matter fatts under section 26 of the Judicature Act. A reference for triat fatts under section 27 and resutts in an arbitral award, which can only be chaLl.enged on the grounds specified in Order 47, Rul'e 15 of the Civit Procedure Rutes. ln this case, there was no arbitral award, but an inquiry resulted in the submission and admission of a joint report, Exhibit D2, indicating that the reference was for inquiry on a matter of fact under section 26 of the Judicature Act. The report estabLished the extent of the work performed by the ptaintiff/respondent. The report's findings lead to the inference that the work measured was aLready paid for, and the respondent's ctaim was for work al.LegedLy done beyond the scope of the joint report's measurements. The learned triat judge's duty was to either adopt or reject the report. The judge rejected the report based on doubts about DWI's quatifications. DW1, Kasiita A. Mustafa, identified himsetf as a road inspector emptoyed by Nichotas 0duwe ConsuLting Engineers and Ptanners. Under cross- examination, he stated that he hel.d a higher diptoma in civil' engineering from Kyambogo University and worked as a measurement technician, joining the defendant company f rom 2004 to 2008. The triaL judge questioned DW1's qual.if ications, but there is no credibte basis to assert that a measurement technician, as DWl was, coutd not perform the measurements ordered by the court. The measurement was ordered after the suit was fited. cruciatl.y, the report was jointty prepared by Mr. Nichol.as E. Oduwe for the ptaintiff/respondent and DWl for the defendant/appetl.ant. The quatifications of Mr. NichoLas 0duwe were not even referred to As a joint report based on a court-ordered factuaI inquiry, there was no 10 15 20 25 30 35 5 and agree with aLt the proposed orde;F. Dated at KamPata 16" 3ffi or 10 L 2025 op er Madrama lzama Justice of the SuPreme Court 4 justification for rejecting the measurements contained within it The damages ctaim hinged on the assertion that the ptarntiff compteted more work than measured in the joint report. ln conctusion, I concur with the judgment of my learned sister, Musoke, JSC, I THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA (Coram: Tuhaise, Chibita, Musoke, Musota & Madrama,IJSC) CNIL APPEAL NO.14 OF 2018 SBI INTERNATIONAL HOLDINGS AG (U) LTD... ......APPELLANT Versus COF INTERNATIONAL COMPANY LTD... ............RESPONDENT (Atr nppent nrising front tlrc ltdgnrcnt of tlrc Court of Appenl in Ciuil Alp':!lo lgis' of ZOI+ befora Kasulc, Knkr,,tt nnrl Oburn, IJA, dnted 23"t Mny, 20'18.) proposed. since all members of the Coram agree with the lead judgement, this appeal is allowed with the orders as proposed in the lead judgment. Judgment of Percy Night Tuhaise, fSC I have had the benefit of reacling in draft the ]udgment prepared by *y learned sister Lady ]ustice Elizabeth Musoke, |SC' I agree with irer findings and decision. I also agree with the orders she has Dated at Kampala, this ... 3*..day of 2025. .,^I,..o^,"'t'q Percy Night Tuhaise fustice of the SuPreme Court IN THE SUPREME COURT OF UGANDA AT KAMPALA (CORAM: TUHAISE, CHIBITA, MUSOKE, MUSOTA, MADRAMA,IISCI CIVIT APPEAL NO 014 OF 2018 SBI INTERNATIONAL COMPANY LTD APPELLANT VERSUS COF INTERNATIONAt COMPANY LTD ::: : : : ::::::r:r:: : r::: RESPONDENT (Appeal against the decision of the Court of Appeal in Court of Appeal Civil Appeal No, 194 of 2014 dated 23d May 2018 b€fore (Kasule, Kakuru and Obura, JJA) JUDGMENT OF CHIBITA JSC I have had the benefit of reading in draft judgment prepared by my learned sister, Justice Elizabeth Musoke, JSC, and I agree with her reasoning, analysis and the orders she has proposed. + M J Dated at Kampala this ) .day of A) 202s on tce ik e ibita JUSTICE OF THE SUPREME COURT tt\ 'tf^,5 BAr% u& )a;*^"> >_oe=q, Drr^'t a{t SC THE REPUBLIC OF UGANDA Spe^" ( THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT I(AMPALA CIVIL APPEAL NO. O14 OF 2O2O (Aising out of the decision of the Court of Appeal (Kasule, Kakunt and Obura, JJA) in Ciuil Appeal No. 194 of 2014) CORAM: TUI{AISE; CHIBITA; MUSOKE; MUSOTA; MAI)RAMA, JJSC SBI INTERNATIONAL HOLDINGS AG (U) LTD ::::::::: APPELLANT VERSUS COF INTERNATIONAL COMPAtil]I LTD : : : : : : : : : : : : : : : R.ETSPONDENT JUDGMENT OF STEPHEN MUSOTA, JSC I have had the benefit of reading in draft the judgment by my sister Hon. Justice Elizabeth Musoke, JSC. I agree with her analysis, conclusions and the orders she has proposed. I have nothing useful to add. Dated this 3 ,4 day of 2025 @o"Tl".-'.'' Stephen Musota WSTICE OF THI SUPREME COURT