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SBI International Holdings (U) Limited v COF International Co. Limited (Civil Appeal No. 194 of 2014)

Court of Appeal · [2018] UGCA 21 · 2018 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
First appeal from High Court judgment in a civil suit for breach of contract
Decision
Appeal dismissed; High Court judgment and awards upheld

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Holding

The Court of Appeal dismissed the appeal, upholding the High Court's finding that the appellant breached the sub-contract by unilaterally increasing the prices of cement and diesel based on market rates rather than the contract terms. Although the trial Judge wrongly applied the Contract Act No. 7 of 2010 to a 2006 contract, this caused no prejudice because the definition of a contract was substantively unchanged from the repealed Contract Act Cap 73. The special damages were specifically pleaded and proven, and the awards of general and punitive damages, and interest, disclosed no error of principle. The appellant's conduct, being calculated to make a profit exceeding compensation, justified punitive damages.

Facts

The appellant was subcontracted by the respondent on 4 April 2006 to build water side drains in grouted stone pitching at one of the respondent's sites in Kasese District. The agreed rate was Ug. Shs. 18,000 per square meter of road pitched with stone, with the appellant to supply cement and diesel. A dispute arose over payments and the nature and quality of the works executed. A work plan with additional instructions was developed during execution. The respondent contended the appellant unilaterally increased the prices of cement and diesel based on market prices, contrary to the contract terms requiring additional costs to be agreed in advance. The contract permitted variations for better execution provided additional payment was agreed in advance. The respondent sued for breach of contract and special damages. The High Court found for the respondent, awarding special and punitive damages and dismissing the appellant's counterclaim. The appellant appealed against these findings and awards.

Issues

  1. Whether the trial Judge erred by applying the Contract Act No. 7 of 2010 to a contract executed in 2006.
  2. Whether the appellant was in breach of the sub-contract.
  3. Whether the work plan and variations formed part of the sub-contract.
  4. Whether the award of special damages of Ug. Shs. 208,186,123/= was justified.
  5. Whether the award of general damages and punitive damages was justified.
  6. Whether the trial Judge erred in dismissing the appellant's counterclaim.

Orders

  • Appeal dismissed with costs to the respondent.

Key headnotes

Retrospective Application of Statutes — Contract Act No. 7 of 2010 — No Prejudice Where Definition Unchanged
Where a trial judge applies a later statute to a contract executed before its enactment, the error does not vitiate the decision if the statute did not substantively alter the legal position; the new Contract Act No. 7 of 2010 did not change the traditional common law definition of a contract that applied under the repealed Contract Act Cap 73.
Breach of Contract — Variations and Unilateral Price Increases
Where a contract permits variations provided additional costs are agreed in advance, a party who unilaterally increases the prices of supplied materials based on market rates, without prior agreement and to the detriment of the other party, commits a breach of contract.
Special Damages — Specific Pleading and Strict Proof
Special damages must be specifically pleaded and strictly proven; where the plaintiff has detailed the special damages in the pleadings and the evidence establishes them, the award will not be disturbed on appeal.
Punitive Damages — Conduct Calculated to Make a Profit Exceeding Compensation
Punitive damages may be awarded where the defendant's conduct was calculated to make a profit for himself which may exceed the compensation payable to the plaintiff.
Appellate Interference with Damages Awards
An appellate court will not reverse a judgment on a question of damages unless satisfied that the trial judge acted on a wrong principle or that the amount awarded was so extremely large or so very small as to constitute an entirely erroneous estimate resulting in a miscarriage of justice.
First Appeal — Duty to Reappraise Evidence
On a first appeal, the appellate court is required to reappraise all the evidence adduced at trial and to arrive at its own inferences on all issues of law and fact.

Legislation cited (2)

  • Contract Act No. 7 of 2010
  • Contract Act Cap 73

Cases cited (7)

  • Omunyokol Akol Johnson v Attorney General (Civil Appeal No. 6 of 2012)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Pandya v R [1957] EA 336
  • Bogere Moses and Another v Uganda (Criminal Appeal No. 1 of 1997)
  • Uganda Revenue Authority v Wanume David Katamirike (Civil Appeal No. 43 of 2010)
  • Ahmed Ibrahim Bholm v Car & General Ltd (Civil Appeal No. 12 of 2002)
  • Crooks Vs Bernard [1964] AC 1131
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.