Wakilii

Monday Eliab v Attorney General [2011] UGSC 12

Supreme Court · 2011 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second civil appeal to the Supreme Court from the Court of Appeal in a breach of contract suit concerning the hire of a motor vehicle to State House
Decision
Appeal allowed; Court of Appeal judgment set aside; appellant awarded hire income for 1 April 1998 to 29 January 2000 less a 40% discount, plus 8% interest from filing; return of the vehicle declined

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Holding

The Supreme Court allowed the appeal, holding that the Court of Appeal wrongly found the hire contract frustrated. Frustration was not pleaded in the respondent's written statement of defence or memorandum of appeal and could not be read into a general ground alleging failure to evaluate evidence. The burden of proving frustration lay on the respondent who asserted it (Evidence Act s.101(1)); the evidence showed the vehicle was only damaged, not destroyed, and increased burden of performance is not frustration. As bailee, State House remained in constructive custody, and had to give notice to terminate the indefinite hire, until police released the vehicle to a third party on 29 January 2000. The appellant was awarded hire income for that period, discounted 40%, with interest.

Facts

The appellant, trading as Country Wide Contractors, hired his Toyota Land Cruiser (Reg. No. 860 UAJ) to State House at Shs 200,000/= per day on a self-drive basis, effective from 7 March 1998 and dependent on Local Purchase Orders. On 31 March 1998, while travelling in a presidential convoy on Masaka Road, the vehicle was involved in an accident and was towed to Masaka Police Station, where it was kept for safe custody. On 29 January 2000 the police released the vehicle to Paul Kaggwa, who retained its registration card and log book and claimed ownership, having earlier purported to sell it to the appellant against a dishonoured cheque. The appellant sued for hire charges, return of the vehicle or its market value, general damages, interest and costs. The High Court gave judgment for the appellant but reduced the claim, while the Court of Appeal reversed, holding the contract frustrated by destruction of the vehicle.

Issues

  1. Whether the Court of Appeal erred in holding that the contract of hire was discharged by frustration when frustration was not pleaded by the respondent.
  2. Whether there was evidence to establish that the contract was frustrated.
  3. Whether the hired motor vehicle was destroyed so as to frustrate the contract.
  4. Whether State House, as bailee, remained in constructive custody of the vehicle after the accident.
  5. Whether the Court of Appeal erred in failing to pronounce on the appellant's cross-appeal.

Orders

  • Appeal allowed and the judgment of the Court of Appeal set aside.
  • Appellant awarded Shs 200,000/= per day from 1 April 1998 to 29 January 2000 as lost income, the total to be discounted by 40%.
  • Interest on that amount to be paid at 8% per annum from the date of filing the suit till payment in full.
  • Appellant's prayer for the return of the motor vehicle declined.
  • Appellant awarded costs of the appeal and costs in the two courts below.

Key headnotes

Civil Procedure — Pleadings — Frustration must be specifically pleaded
A defence of frustration of contract that is not specifically pleaded in the written statement of defence, nor raised as a distinct ground in the memorandum of appeal, cannot be relied upon; a general ground alleging that the trial judge failed to properly evaluate the evidence does not encompass it.
Evidence — Burden of Proof — Frustration of contract
The party who asserts that a contract was discharged by frustration bears the burden of proving it under the Evidence Act s.101(1); only if frustration is proved does the onus shift to the other party to show that the frustrating event was self-induced.
Contract Law — Frustration — Destruction of subject matter distinguished from damage
Mere damage to the subject matter of a contract is not equivalent to its destruction; where performance has merely become more burdensome or difficult, the contract is not frustrated and the parties are not discharged.
Contract Law — Bailment — Hire of chattels — Duty to return and termination by notice
A hirer of a chattel is a bailee who must return it on termination and remains liable unless he proves the chattel perished without his fault; a contract of hire of indefinite duration is terminated only by notice to the other party unless the subject matter is destroyed without the hirer's fault.
Contract Law — Bailment — Constructive possession and loss without fault
Where a bailee's original possession was lawful and a continuing duty to deliver up the article exists, it is no defence that he no longer has possession unless he proves that possession was lost without any fault on his part.
Damages & Quantum — Mitigation of loss
A finding that a claimant failed to mitigate his loss cannot stand where the claimant took reasonable steps to limit the loss and those efforts met with no cooperation from the party in breach.

Legislation cited (3)

  • Evidence Act s.101(1)
  • Judicature (Court of Appeal) Rules r.86(1)
  • Judicature (Court of Appeal) Rules r.102(a)

Cases cited (5)

  • Interfreight Forwarders (U) Ltd v EADB [1990-1994] EA 117
  • Taylor v Caldwell (1863) 3 B & S 826
  • Musisi Divia v Sietco (Civil Appeal No. 24 of 1993)
  • Howard & Co. (Africa) Ltd v Burton [1964] EA 540
  • Charles Douglas Cullen v Persram & Hansraj [1962] EA 159
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.