Wakilii

Goustar Enterprises Ltd v John Kokas Oumo (Civil Appeal 8 of 2003)

Supreme Court · [2006] UGSC 13 · 2006 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second civil appeal to the Supreme Court from the Court of Appeal in a sale of goods dispute
Decision
Appeal dismissed; the Court of Appeal's orders stand, leaving the respondent entitled to a refund of Shs 18,355,120 with interest and Shs 5,000,000 general damages

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Cited — treatment unverified cited in 5 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

The Supreme Court dismissed Goustar's second appeal. Where a buyer makes known the particular purpose for which goods are required and relies on the seller's skill and judgment, the Sale of Goods Act implies a condition that the goods be reasonably fit for that purpose. Two of three supplied tractors were defective on testing — one overheating, the other with a hydraulic fault — so the implied condition was breached. The breach went to a condition, not a warranty, so the buyer was entitled to reject; he had not accepted the goods, having had no reasonable opportunity to examine them before testing. No relief could be granted for unpleaded repair costs. The Court of Appeal's refund and damages awards stood.

Facts

Goustar Enterprises entered a memorandum of understanding with the Uganda National Farmers Association to supply tractors to members. The respondent, a member, ordered three tractors with implements at a total price of Shs 105,679,140 plus tax, and paid a 50% deposit of Shs 53,584,500. The tractors were supplied in July 1997 and kept at the respondent's home awaiting testing. When tested in the presence of the appellant's agent about two months later, two of the three tractors proved defective — one overheated, the other had a hydraulic fault preventing the plough from engaging — while the third worked. The respondent rejected the two defective tractors and the appellant took them away. The appellant said they were taken for repair; the respondent said he had rejected them. The appellant had given a 12-month warranty. When the parties failed to agree, the respondent sued in the High Court for a refund of the sums deposited towards the purchase of the tractors.

Issues

  1. Whether the defects in the tractors existed at delivery or developed while the goods were in the buyer's possession, and on whom the burden of proof lay.
  2. Whether the buyer rejected the tractors or merely returned them for repair.
  3. Whether there was an implied condition that the tractors be reasonably fit for the buyer's particular purpose under the Sale of Goods Act.
  4. Whether the breach was of a condition entitling the buyer to reject the goods or of a warranty entitling only a claim for damages.
  5. Whether the Court of Appeal's computation of the refund was correct and whether relief could be granted on repair costs that were not pleaded.

Orders

  • Appeal dismissed.
  • Costs of the appeal awarded to the respondent in the Supreme Court and in the courts below.

Key headnotes

Sale of Goods — Implied Condition of Fitness for Purpose — Reliance on Seller's Skill and Judgment
Where a buyer expressly or by implication makes known to the seller the particular purpose for which goods are required so as to show reliance on the seller's skill or judgment, and the goods are of a description the seller deals in, there is an implied condition under section 15(1)(a) of the Sale of Goods Act that the goods shall be reasonably fit for that purpose.
Sale of Goods — Acceptance — Reasonable Opportunity to Examine
Under section 34 of the Sale of Goods Act, a buyer who has not previously examined goods is not deemed to have accepted them until he has had a reasonable opportunity of examining them to ascertain whether they conform to the contract.
Sale of Goods — Condition Distinguished from Warranty — Right to Reject
Breach of a condition, the performance of which is essential to the contract, entitles the buyer to reject the goods and treat the contract as repudiated, whereas breach of a mere warranty collateral to the main purpose of the contract gives rise only to a claim for damages and not a right to reject.
Pleadings — Relief Not Founded on the Pleadings
A court will not grant relief on a ground that was not pleaded; a seller who did not counterclaim for the cost of repairing defective goods cannot be granted relief on that issue.
Scheduling Conference and Framing of Issues — Duty of the Trial Court
A trial court should hold a scheduling conference under Order XB Rule 1(1)(b) of the Civil Procedure Rules and frame issues under Order 13 Rule 1(5) before trial; embarking on a civil trial without framing issues risks an unfocused hearing and improper attempts to accommodate both parties in judgment.
Appeals — Re-evaluation of Evidence on a Second Appeal
A second appellate court is not, except in the clearest of cases, required to re-evaluate the evidence as a first appellate court does, but it must correct errors where the first appellate court failed to re-evaluate the evidence or applied wrong principles.

Legislation cited (8)

  • Sale of Goods Act s.34 (formerly s.35)
  • Sale of Goods Act s.15 (formerly s.16)
  • Sale of Goods Act s.15(1)(a)
  • Sale of Goods Act s.1(o)
  • Civil Procedure Rules Order XB Rule 1(1)(b)
  • Civil Procedure Rules Order 13 Rule 1(5)
  • Rules of the Court of Appeal Rule 29(1)
  • Civil Procedure (Amendment) Rules 1998 (SI 1998 No. 26)

Cases cited (12)

  • Banco Arabe Espanyol v Bank of Uganda (Civil Appeal No. 8 of 1998)
  • Habre International Co. Ltd v Abraham Alayakha & Others (Civil Appeal No. 4 of 1998)
  • Muluta Joseph v Katama Sylvano (Civil Appeal No. 11 of 1999)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Pandya v R (1957) EA 366
  • Bogere Charles v Uganda (Criminal Appeal No. 10 of 1998)
  • Kinyanjui v D T Dobie & Co. (Kenya) Ltd [1975]
  • Sugar Corporation of Uganda Ltd v Lawsam Chemical (U) Ltd (Civil Appeal No. 5 of 2001)
  • Manchester Liners v Rea [1922] 2 AC 14
  • Kampala General Agency 1942 Ltd v Mody's EA Ltd [1963] EA 549
  • Candy v Caspair Air Charter Ltd [1956] EACA 139
  • Francis Sembuya v AllPorts Services (U) Ltd (Civil Appeal No. 6 of 1999)
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.