Wakilii

Batabane v Surgipharm Ltd (Civil Appeal No. 218 of 2013)

Court of Appeal · [2019] UGCA 152 · 2019 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
First appeal from a High Court judgment dismissing a civil suit for damages for unlawful termination of an employment contract.
Decision
Appeal allowed; finding of frustration reversed; appellant awarded special and general damages, interest and costs assessed by the Court of Appeal in exercise of original jurisdiction.

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Holding

The Court of Appeal held that the employment contract was not frustrated but wrongfully repudiated by the respondent before its commencement date. The trial Judge erred in applying the doctrine of frustration, which requires a supervening event making performance impossible; the alleged failure to undertake familiarisation visits could not frustrate a contract that had not commenced, especially where no date was agreed. Under sections 91 and 92 of the Evidence Act, oral evidence of familiarisation could not vary or add a condition precedent to the written contract. Exercising original jurisdiction, the court assessed damages, awarding UGX 89,900,000 special damages (discounted 50% for lump-sum and mitigation) and UGX 25,000,000 general damages, plus interest and costs.

Facts

The appellant was gainfully employed at ZK Advertising Ltd earning UGX 5,800,000 per month. In January 2008 the respondent, Surgipharm Ltd, sought him for the position of Commercial/Finance Manager at UGX 6,500,000 per month. After interviews and a job offer, the appellant signed a written employment contract on 15 February 2008 with a stated commencement date of 25 March 2008, and resigned from his former employer on 18 February 2008. The parties orally agreed the appellant would visit the respondent's premises to familiarise himself before commencement, but no specific date was fixed. The respondent attempted to contact the appellant by email while he was in his home village without internet, and on 25 February 2008 terminated the contract about one month before commencement. The appellant reported on 11 March 2008 only to find the contract terminated. He sued for damages for deceit, misrepresentation and negligence. The High Court held the contract was frustrated and made no order as to damages or costs, prompting this appeal.

Issues

  1. Whether the trial Judge erred in holding that the contract of employment was frustrated.
  2. Whether oral evidence of the agreed familiarisation visits was admissible to vary the terms of the written employment contract.
  3. Whether the termination of the contract before its commencement was an unlawful repudiation entitling the appellant to damages.
  4. Whether the appellant was entitled to special and general damages and the proper assessment thereof.

Orders

  • Ground 1 of the appeal allowed.
  • Ground 2 of the appeal struck out as superfluous.
  • Ground 3 of the appeal partially allowed.
  • Ground 4 of the appeal allowed.
  • Ground 5 of the appeal allowed.
  • Appellant awarded UGX 89,900,000 as special damages for loss of earnings.
  • Appellant awarded UGX 25,000,000 as general damages.
  • Interest awarded at 14% per annum from 27 March 2013 until payment in full.
  • Appellant awarded costs in the Court of Appeal and in the High Court.

Key headnotes

Contract Law — Frustration — Requirement of a supervening event making performance impossible
Frustration applies only where a supervening event for which neither party is responsible destroys the basis of the contract and renders performance radically different or impossible; a matter the parties never provided for cannot frustrate a contract that has not yet commenced.
Evidence — Parol Evidence Rule — Exclusion of oral terms varying a written contract
Under sections 91 and 92 of the Evidence Act, where the terms of a contract have been reduced to writing, no oral evidence is admissible to contradict, vary, add to or subtract from those terms, save within the statutory exceptions; an oral agreement cannot make the written commencement date conditional on a separate, undocumented familiarisation requirement.
Employment & Labour — Probationary Contract — Whether probationary period applies before commencement
A probationary period stipulated in an employment contract commences only on the contract's commencement date; where a contract is repudiated before commencement, no probationary period has begun and the statutory notice provisions for probationary contracts under section 67 of the Employment Act do not apply.
Contract Law — Repudiation — Wrongful repudiation before commencement and award of damages
Where one party wrongfully repudiates a contract before its commencement date and the other accepts the repudiation, the innocent party is entitled to damages; the appropriate remedy is the assessment of damages rather than treating the contract as frustrated with loss lying where it falls.
Damages & Quantum — Special Damages — Mitigation and lump-sum discount
An innocent party claiming special damages for loss of earnings following wrongful repudiation must strictly prove the loss and has a duty to mitigate; where damages are awarded as a lump sum the court may discount the assessed loss to reflect advance payment.
Civil Procedure — Appellate Powers — First appellate court exercising original jurisdiction to assess damages
Under section 11 of the Judicature Act, the Court of Appeal has all the powers of the court from which the appeal emanated and may assess damages for the first time rather than remit the matter, particularly to avoid prolonging long-running litigation.

Legislation cited (10)

  • Evidence Act Cap 6 s.91
  • Evidence Act Cap 6 s.92
  • Evidence Act Cap 6 s.79
  • Employment Act 2006 s.66
  • Employment Act 2006 s.67
  • Employment Act 2006 s.67(4)
  • Employment Act 2006 s.24(1)
  • Judicature Act Cap 13 s.11
  • Civil Procedure Act s.26(2)
  • Rules of the Court of Appeal Rule 30(1)

Cases cited (15)

  • Davis Contractors Ltd v Fareham UDC [1956] AC 696
  • Doreen Rukundo v International Law Institute (Supreme Court Civil Appeal No. 8 of 2005)
  • Derry v Peek (1886-90) All ER 1
  • Rosa Nathanson v May Murphy (Court of Appeals of California, 1995)
  • Vine v National Dock Labour Board [1956] QB 658
  • Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361
  • John Nagenda v Sabena World Airlines (Civil Suit No. 1408 of 1998)
  • Peters v Sunday Post Limited [1958] 1 EA 424
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Krell v Henry [1903] 2 KB 740
  • Taylor v Caldwell (1863) 3 B & S 826
  • Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] 2 All ER 122
  • Chandler v Webster [1904] 1 KB 493
  • Taller v Law Accident Insurance Society Ltd [1936] 2 All ER 952
  • Heyman v Darwins Ltd [1942] AC 356
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.