Judgment Laura Kinalwa V Campscan
Judgment Laura Kinalwa V Campscan
LAURA KINALWA::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::PLAINTIFF
VERSUS
COMPUSCAN CRB LTD::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::DEFENDANT
All systems of law which recognize a law of contract and a law of tort (or delict)
have to solve the problem of the possibility of concurrent claims arising breach of
duty under the two rubrics of the law. Although, there are variants, broadly
speaking, two possible solutions present themselves; either to insist that the
claimant should pursue his remedy in contract alone, or to allow him to choose
which remedy he prefers. See See Henderson v Merret Syndicates Ltd [1994] 3 All
ER 506; Hajara Farms Ltd Societe Generale SG-SSB [2012] 43 GMJ 97 SC.
The contractual obligations may give rise to tortious liability to enable a party
pursue claims in both tort and contract and this will only be possible by considering
the circumstances of the case or facts
The elements of the tort of deceit were stated in the case of Panatron Pte Ltd v Lee
Cheow Lee [2001] 2 SLR (R) 435 as follows;
a) There must be a representation of fact made by word, writing or conduct.
b) The representation must be made with knowledge that its false; it must be
willfully false, or atleast made in absence of any genuine disbelief that it is
true.
c) The representation must be made with the intention that it should be acted
upon by the Plaintiff, or by a class of persons which includes the Plaintiff.
d) The Plaintiff had acted upon the false statement.
e) The Plaintiff suffered damage in doing so.
The tort of deceit seeks to protect the person from injury caused by the another’s
deliberate lie. Fraud was defined by Court in Fredrick Zzabwe v Orient Bank & 5
Ors Civil Appeal No. 4/2006 while relying on the on the Black’s law Dictionary 6th
Edition page 660, as “An intentional perversion of truth for the purpose of inducing
another in reliance upon it to part with some valuable thing belonging to him or to
surrender a legal right. A false representation of a matter of fact, whether by words
or conduct, by false or misleading allegations, or by concealment of that which
deceives and is intended to deceive another so that he shall act upon it to his legal
injury.”
The tort of deceit seeks to protect a person from injury caused by another’s
deliberate lie. As search, the representor’s dishonest or fraudulent intent is the
tort’s gravamen. Dishonesty is the touchstone which distinguishes fraudulent
misrepresentation from other forms of misrepresentation. This turns on the
intention and belief of the representor. A party complaining of having been misled
by a representation to his injury has no remedy in damages under the general law
unless the representation was not only false, but fraudulent.
The defendant also contended that the claims in deceit and fraudulent
misrepresentation are frivolous and vexatious. That since the contract specifically
provided that the Plaintiff would be entitled to commission if she met the specified
sales targets, its frivolous to contend that such a provision, which is an undisputed
fact, amounts to deceit or misrepresentation.
The Black’s Law Dictionary 8th Edition pg. 629 defines frivolous as lacking a legal
basis or legal merit; not serious and not reasonably purposely. A vexatious suit is a
law suit instituted maliciously and without good cause. An action is vexatious if the
party bringing it is not acting bonafide and merely wishes to annoy or embarrass
the opponent or when it is not calculated to lead to any practical result. See
Lehman Brothers Special Financing Inc v Hartadi Angkosubroto [1998] 3 SLR (R)
664.
The plaintiff under paragraph 4.19 of plaint provided for deceit the particulars of
which were highlighted as follows;
a) The defendant represented to the Plaintiff during the negotiations of the
Agreement that she would be entitled to the commission under Clause 6.4
which commission was to be computed basing on the different tiers.
b) That the defendant induced and beguiled the plaintiff to act on this
statement leading her to earn the Defendant a total of UGX 3,103,534,000/=
as sales from new business in respect of which the defendant refused to
remit her commission.
In the instant case, apart from alleging that the defendant represented to her that
she would be entitled to a commission and that the defendant Induced and
beguiled her to act on the statement, the plaintiff never adduced any evidence or
proof to show that he was induced to enter in to an employment contract by deceit.
There’s no evidence of a representation of fact or conduct on the part of the
defendant to implicate the company to have induced the Plaintiff to enter in to an
agreement with the company. There’s no evidence that that the Defendant
company made a false statement to induce the Plaintiff to enter in an employment
contract on probation.
Having looked at the evidence before this honourable court including the pleadings
and annexures, the Plaintiff never produced any evidence relating to deceit and
fraudulent misrepresentations. The plaintiff only alleges that the defendant
represented to her during negotiations of the Agreement but never produced any
proof of the representations that induced her to enter the agreement. The
plaintiff’s allegations that the defendant company deliberately made false
representations to her that she would entitled to commission basing on the
different tiers are unfounded are lack any basis for proof. Section 103 of the
Evidence Act is to effect that the burden of proof as to any particular fact lies on
the person who wishes the court to believe in its existence.
I am persuaded to agree with the defendant that the claims in deceit and
misrepresentation are frivolous and vexatious. Frivolous connotes the absence of
seriousness or lack of validity or legitimacy. The plaintiff having failed to prove any
breach of contract upon failure to pay the alleged commissions cannot sustain the
action in deceit and misrepresentation. The plaintiff did not introduce any new
business in the defendant’s business in order to be entitled to any commissions.
Fraud and misrepresentation vitiate a contract and make the contract voidable
(see; the Contracts Act, 2010, section 16).
From the evidence on record, the plaintiff didn’t adduce any evidence to show that
the defendant made a false statement to induce her in to entering an employment
agreement with defendant company. It’s on record that before both parties
entered in to the employment agreement, they negotiated the terms of the
agreement. This implies that the plaintiff entered in to the agreement with
defendant willfully without any fraudulent misrepresentation.
Therefore, from the evidence on record the defendant is not liable for any deceit
and fraudulent misrepresentation inducing the plaintiff to enter in to the
Employment contract on probation.
Whether the defendant is liable for unjust enrichment for withholding and refusal
to remit UGX 310,353,400?
The Defendant also submitted that the claim for unjust enrichment is barred by law
as a claim in unjust enrichment is automatically barred in respect of facts that also
establish a breach of contract.
Analysis
I have examined the evidence of both parties and noted that although the
defendant claims that unjust enrichment is barred by law in respect to facts that
also establish a breach of contract, he never cited such a law that bars the said
claim for unjust enrichment. On that note I believe the defendant’s objection is
unfounded and should be overruled. Unjust enrichment usually arises where
money is had and received. Counsel for the defendant should address himself to
cases where both claims of breach of contract and unjust enrichment have been
used as grounds for recovery of money. Such cases include Clothing (U) Ltd v
African Trade Investments Fund and Another Civil Suit No. 234 of 2010 and Nakate
Halima v Farming Consultant and Management Company Limited (FAMCOM) and
others Civil Suit No. 499 of 2019. In both cases parties sued for breach of contract
where unjust enrichment was also a ground of claim under money had and
received.
In the case of Moses v Macfarlane supra, Court held that “The principle of unjust
enrichment requires; first, that the defendant has been enriched by the receipt of
a benefit; secondly, that this enrichment is at the expense of the Plaintiff and
thirdly, that the retention of the enrichment is unjust. This qualifies restitution”
In paragraph 4.18 of the Plaint, the Plaintiff laid out the particulars of unjust
enrichment as follows;
a) Illegally and wrongfully withholding the Commission due to the Plaintiff in
the sum of UGX 310,353,400 (Three Hundred and Ten Million, Three
Hundred Fifty-Three Thousand, Four Hundred Shillings Only).
b) Persistent unlawful refusal by the Defendant to remit the Plaintiff’s
commission in the sum of UGX 310,353,400 (Three Hundred and Ten Million,
Three Hundred Fifty-Three Thousand, Four Hundred Shillings Only) despite
several demands
c) Appropriating the use of the Plaintiff’s money to the Defendant having
adamantly refused to remit the same in the sum of UGX 310,353,400 (Three
Hundred and Ten Million, Three Hundred Fifty-Three Thousand, Four
Hundred Shillings Only).
The principle of unjust enrichment has been well expounded upon in the case of
Shenol & Another v Maximov [2005] EA 280 the court was of the view that; “the
principle is that where one person has received money from another under
circumstances such as in this case he is regarded in law as having received it to the
use of that other. The law implies a promise on his part or imposes an obligation
upon him to make payment to the person entitled. In default the rightful owner may
maintain an action for money had and received to his use”
In the instant case there’s no evidence to show that the defendant received any
money or benefit from the plaintiff at her expense. The plaintiff was simply
promised a commission on sales after attaining a certain threshold which she failed
to attain. The employment agreement was terminated according to the terms of
the agreement. The plaintiff’s salary was well laid out in the agreement and was
well paid to her.
I therefore found no evidence of unjust enrichment on record by the defendant
company and for that matter the defendant is not liable for unjust enrichment in
this particular matter since the plaintiff didn’t meet the required threshold entitling
her to a commission.
Whether the Plaintiff is entitled to a sales Commission of UGX 310,353,400 on
new business in accordance with the terms of the contract of employment dated
17th April 2019.
Having found that there was no breach of contract, deceit and fraudulent
misrepresentation by the defendant, it is prudent to indicate that both parties
entered the agreement willfully. The agreement was also terminated in accordance
with the terms of the agreement. Having noted that the plaintiff didn’t meet the
required thresholds entitling her to a commission, the plaintiff in the circumstances
is not entitled to the said commission. The plaintiff also failed to adduce evidence
before this honourable court to show that he generated new business for the
defendant company. She also failed to adduce evidence to show that she upsold,
cross sold any products while in employment of the defendant.
It would have been prudent for the plaintiff in this matter to apply to this
honourable court for orders of discovery in order to obtain the necessary evidence
needed to prove her case before this court-if at all it was available within the
defendant’s emails as she alleged in cross examination. In the circumstances the
Plaintiff is not entitled to the sales commission of UGX 310,353,400 since no new
business was generated for the defendant company.
The plaintiff’s claim fails in totality and the suit is dismissed with costs to the
defendant.
I so order.
Ssekaana Musa
Judge
25th January 2024