B.M. Technical Services Ltd v Crescent Transporters Co. Ltd [2003] UGSC 33

Supreme Court · 2003 Appeal Partly Allowed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second appeal to the Supreme Court from a Court of Appeal decision in a breach of contract (carriage of goods) suit

Decision

Appeal partially allowed; interest rate on the decretal amount reduced from 22% to 10% per annum, otherwise the Court of Appeal's award upheld

The full judgment

Read the complete, verbatim text of this judgment.

Cited — treatment unverified cited in 1 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

The Court dismissed the challenges to the special damages, mitigation and existence of the contract, holding that the written and oral terms were admitted, that a carrier owes an implied duty to take reasonable care of goods in its possession, and that the respondent had no real opportunity to mitigate where completion of the contract lay exclusively with the defaulting appellant. On interest, the Court held the contract was a non-commercial carriage and clearing contract, so the Court of Appeal erred in labelling it commercial and fixing 22%; appellate courts may interfere with an interest award lacking a basis in law. The 22% rate was excessive and was reduced to 10% per annum from the date of filing the suit. The appeal partially succeeded.

Facts

The respondent contracted to clear the appellant's container from Mombasa and deliver it to Kampala for US$4,050 in freight and clearing charges. The written terms required the appellant to collect the container within four days of notice of arrival, failing which US$150 per day storage accrued; an oral term required return of the container to Mombasa within a month, failing which US$20 per day trailer detention accrued. The container arrived in Kampala on 11.11.1998 and the appellant was notified on 12.11.1998. The appellant paid US$2,167 and promised the balance by 10.12.1998 but failed to pay or to collect the container. Two cheques were dishonoured. The respondent eventually dropped the container at its premises on 28.5.1999 and sued in the High Court for a balance of US$35,820. The appellant contended the agreed destination was Mbarara, not Kampala, failed to appear, and the suit was heard ex parte. The trial judge awarded US$1,883 freight, rejected the detention charges and allowed 4% interest. On the respondent's appeal, the Court of Appeal allowed the detention charges and raised interest to 22%.

Issues

Whether the respondent was entitled to special damages that were not properly pleaded or proved.
Whether the respondent was entitled to damages that it could have mitigated.
Whether the allied request constituted a binding contract between the parties.
Whether the Court of Appeal erred in interfering with the trial judge's discretion and awarding an excessive interest rate of 22%.

Orders

Ground 4 of the appeal allowed; grounds 1, 2 and 3 dismissed.
The Court of Appeal's award of interest at 22% per annum on the decretal amount set aside.
Interest substituted at 10% per annum on the decretal amount from the date of filing the suit until full payment.
Three-quarters of the costs in the Supreme Court and the courts below awarded (beneficiary stated inconsistently in the judgments).

Key headnotes

Contract Law — Carriage of Goods — Implied Term to Take Reasonable Care

It is an implied term of a contract of carriage of goods that the carrier must take reasonable care to protect the goods in its possession.

Contract Law — Damages — Mitigation of Loss

A party alleging failure to mitigate must show how the loss could have been mitigated; where completion of the contract lies exclusively in the hands of the defaulting party, the innocent party is not obliged to contemplate or mitigate loss.

Damages & Quantum — Interest — Appellate Interference with Trial Court Discretion

Although the award of interest is at the discretion of the trial court under section 26(2) of the Civil Procedure Act, an appellate court may interfere where the rate fixed has no basis in law or is unjustifiably high or low.

Damages & Quantum — Interest — Non-Commercial Contracts

Where a contract is not a commercial transaction, an interest rate of 22% per annum is excessive; section 26(3) of the Civil Procedure Act, which deems interest at six per centum per annum where a decree is silent, may serve as a guide, and a moderate rate is appropriate.

Legislation cited (2)

Civil Procedure Act s.26(2)
Civil Procedure Act s.26(3)

Cases cited (2)

Ecta (U) Ltd v Geraldine S. Namirimu & Josephine Namukasa (Civil Appeal No. 29 of 1994)
Sietco v Noble Builders (U) Ltd (Civil Appeal No. 31 of 1995)

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.