Wakilii

Ajaib Transport Ltd v Verma Co Ltd (HCCS 792 of 2015)

High Court · [2020] UGCOMMC 135 · 2020 Judgment for Plaintiff / Counterclaim Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and conversion, with counterclaim for money had and received
Decision
Judgment entered for plaintiff on main claim and for defendant/counterclaimant on counterclaim; special damages, general damages, and interest awarded as specified

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a written service agreement existed between the parties for a ten-year term. The defendant's termination on grounds of fundamental breach was unjustified where the one-day delivery delay, caused by a mechanical fault repaired by the plaintiff's driver, caused no detriment to the goods and did not constitute fundamental breach under the contract requiring delivery within reasonable time during daylight hours. The defendant was liable for breach of contract but not conversion, as the plaintiff's claim for payment in lieu of notice subsumed the period of detention. The plaintiff was entitled to unpaid invoices, payment in lieu of three months' notice, and general damages. The defendant succeeded on the counterclaim for the balance of the advance payment.

Outcome

Judgment entered for plaintiff on main claim and for defendant/counterclaimant on counterclaim; special damages, general damages, and interest awarded as specified

Facts

Plaintiff transport company contracted with defendant to transport defendant's goods at US$ 200 per truck per day under a written ten-year service agreement dated 9 July 2015. One truck experienced a gear box fuse failure en route to Mbarara on 26 September 2015 and parked at Lukaaya while the driver sourced a replacement fuse, causing a one-day delay. Defendant terminated the contract on 5 October 2015 on grounds of fundamental breach, alleging the driver deliberately parked the truck and fabricated the mechanical fault. Defendant detained plaintiff's trucks at her agent's premises to remove specialized containers and to secure refund of a US$ 52,461 advance payment. Defendant subsequently offset US$ 20,856 from plaintiff's September invoice against the advance, leaving US$ 31,605 outstanding. Plaintiff claimed breach of contract for wrongful termination and conversion for detention of trucks. Defendant counterclaimed for the outstanding balance of the advance.

Issues

  1. Whether there was a contract for services between the Plaintiff and the Defendant?
  2. Whether the Defendant is liable for breach of contract?
  3. Whether the parties are entitled to any remedies as contained in the Plaint and the Counterclaim?

Orders

  • Defendant to pay special damages of US$ 22,744 and US$ 20,856 being unpaid invoices for August 2015 and September 2015 respectively to the Plaintiff.
  • Defendant to pay special damages of US$ 59,200 as payment in lieu of notice of termination to the Plaintiff.
  • Defendant to pay general damages of UGX 50,000,000 to the Plaintiff.
  • Interest on special damages at 20% per annum from 1st December 2015 till payment in full.
  • Interest on general damages at 6% per annum from date of judgment till payment in full.
  • Defendant to pay 2/3 of the Plaintiff's costs.
  • Counter-Defendant to pay special damages of US$ 31,605 to the Counterclaimant.
  • Interest on counterclaim at 20% per annum from date of judgment till payment in full.
  • Counter-Defendant to pay 2/3 of the Counterclaimant's costs.

Rules and key headnotes

Contract Law — Formation — Written Agreement — Proof of Execution
Where a service agreement bears the operational seals of both parties and a director confirms its execution by email communication stating the contract is signed, the agreement is binding on the parties notwithstanding subsequent denial of execution.
Contract Law — Breach — Fundamental Breach — Time of Performance
Where a contract stipulates delivery within reasonable time without fixing a precise time and without making time of the essence, one day's delay in delivery which causes no detriment to the goods, no loss to the owner, and is occasioned by a genuine mechanical fault repaired by the supplier does not constitute fundamental breach.
Contract Law — Breach — Fundamental Breach — Test for Fundamental Breach
In determining whether a breach is fundamental, the court must consider: the nature of the contractual obligation; the gravity of the consequences of the breach; whether the breach deprives the aggrieved party of substantially the whole benefit of the contract; the extent of damages; whether the supplier totally failed to deliver or was unwilling to deliver; and whether the purpose of the contract was achieved.
Contract Law — Termination — Notice Period — Payment in Lieu of Notice
Where a contract provides for termination on three months' notice and one party terminates without notice in breach of contract, the innocent party is entitled to payment in lieu of notice (PILON) calculated at the contractual rate for the full notice period, less non-working days.
Tort Law — Conversion — Elements — Inconsistent Use During Contract Period
A claim for conversion of vehicles cannot succeed where the claimant simultaneously claims payment in lieu of notice of termination for the same period, as the claim for PILON presupposes the contract was still subsisting and the defendant had the right to continue using the vehicles during the notice period.
Evidence — Confessions — Admissibility — Confession to Police Officer
Under Evidence Act section 23, no confession made by a person in custody of a police officer shall be proved against that person unless it is made in the immediate presence of a police officer of or above the rank of Assistant Inspector or a magistrate.
Damages & Quantum — Special Damages — Pleading and Proof — Particularity Required
Where special damages are claimed they must be pleaded with sufficient specificity and strictly proved, and the evidence must show the same particularity as the pleading, though the particularity must be tailored to the facts and courts will accept realistic approaches to proof.

Legislation cited (2)

Cases cited (16)

  • Printing & Numerical Registering Co v Sampson (1875) LR Eq 462
  • Stockloser v Johnson [1954] 1 All ER 640
  • Nakano Trading Co Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • Lombard North Central v Butterworth [1987] 1 QB 527
  • Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
  • United Scientific Holdings v Burnley Borough Council [1978] AC 904
  • Daimler Chrysler Inc v Associated Bailiffs & Co Ltd 2005 CanLII 24234 (ON SC)
  • Simpson v Gowers 1981 CanLII 1884 (ON CA)
  • Marfani & Co v Midland Bank [1968] 2 All ER 573
  • Uganda Telecom v Tanzanite Corporation [2005] EA 351
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (SCCA No. 7 of 1995)
  • Dharamshi v Karsan [1974] 1 EA 41
  • Okello James v Attorney General (HCCS No. 574 of 2003)
  • Harbutt's Plasticine Ltd v Wyne Tank & Pump Co Ltd [1970] 1 Ch 447
  • Kinfera v Management Committee of Laroo Boarding Primary School (HCCS No. 099 of 2013)
  • Omunyokol Akol Johnson v Attorney General (SCCA No. 6 of 2012)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Ajaib Transport Ltd v Verma Co Ltd (HCCS 792 of 2015) [2020] UGCommC 135 (9 November 2020)
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.