B.M. Technical Services Ltd v Crescent Transporters Co.Ltd (Civil Appeal 8 of 2002)

Supreme Court · [2003] UGSC 53 · 2003 Appeal Partly Allowed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second appeal to the Supreme Court from a Court of Appeal judgment in a breach of contract claim for carriage and clearing of goods

Decision

Appeal partially allowed; interest rate on the decretal amount reduced from 22% to 10% per annum

The full judgment

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Holding

On a second appeal in a carriage and clearing of goods contract, the Supreme Court upheld the Court of Appeal's findings that a binding contract existed (the Allied Request plus admitted oral terms), that the carrier was under an implied duty to take reasonable care of the goods, and that the respondent had no real opportunity to mitigate its losses while the appellant attempted to perform. Grounds 1–3 failed. On interest, the Court held that the transaction was not a commercial one, that 4% per annum was too low and unreasoned, but that 22% awarded by the Court of Appeal was too high. It substituted interest at 10% per annum from the date of filing. The appeal partially succeeded.

Facts

The respondent carrier contracted to clear the appellant's container from Mombasa and deliver it to Kampala. Under the written terms the appellant was to pay US $4,050 in freight and clearing charges and collect the container within four days of notice of arrival, failing which US $150 per day would accrue while it remained on the respondent's trailer. An oral term required the respondent to return the container to Mombasa within a month, failing which it would pay US $20 per day of trailer detention. The container arrived in Kampala on 11 November 1998 and the appellant was notified the next day. The appellant made part payment of US $2,767 (and later US $2,774), issued dishonoured cheques, acknowledged its indebtedness, but failed to collect the container. The respondent eventually dropped the container at its premises on 28 May 1999 and sued for a balance of US $35,820 in freight and accumulated detention charges. The appellant claimed delivery should have been at Mbarara, not Kampala, but did not appear at the hearing, which proceeded ex parte.

Issues

Whether the respondent was entitled to special damages for container storage and trailer detention that the appellant alleged were not properly pleaded or proved.
Whether the respondent failed to mitigate its losses by retaining the container and trailer.
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 on interest and in awarding interest at 22% per annum.

Orders

Appeal partially succeeds.
The Court of Appeal's order awarding interest at 22% per annum on the decretal amount is set aside and substituted with an order awarding interest at 10% per annum from the date of filing the suit until full payment.
The appellant to have three-quarters of the costs in the Supreme Court and in the courts below.

Key headnotes

Contract Law — Formation — Written and Oral Terms — Admitted Agreement

A document signed by both parties (an Allied Request) together with admitted oral terms constitutes a binding contract where the party against whom it is asserted has not denied its existence or terms and has acted to honour it.

Contract Law — Carriage of Goods — Implied Duty of 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 cannot be required to mitigate a loss where the defaulting party's own admission of the contract and continuing attempts to perform prevent the innocent party from contemplating any loss, leaving no real opportunity for mitigation.

Damages & Quantum — Interest — Appellate Interference with Discretion under Civil Procedure Act s.26

Although the award of interest is at the discretion of the trial court under section 26 of the Civil Procedure Act, an appellate court may interfere where the rate is unreasoned or unjustified; an interest rate appropriate to an ordinary commercial transaction cannot be applied to a non-commercial clearing and carriage of goods contract.

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.