Wakilii

Attorney General v Oriental Construction Co Ltd [1991] UGSC 15

Supreme Court · 1991 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal and cross-appeal from a High Court judgment dismissing a suit for the price of construction work under an oral contract
Decision
Appeal and cross-appeal allowed; High Court judgment set aside; matter remitted to the High Court to assess deductions from US$253,700, with interest and costs to the plaintiff

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains 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 Supreme Court held that, although the parties had agreed there was a contract, the trial judge wrongly found its terms too vague; from the parties' conduct a valid, enforceable contract should have been inferred. Payment before action is a matter of defence, so the burden of proving payment lay on the defendant, who failed to discharge it; there was therefore a breach by non-payment. The appeal and cross-appeal (on costs) were allowed, the judgment set aside, and the case remitted to assess deductions for the plaintiff's wife's ticket and four years' rent-free occupation from US$253,700, with interest at 30% from 4 February 1986 and costs.

Outcome

Appeal and cross-appeal allowed; High Court judgment set aside; matter remitted to the High Court to assess deductions from US$253,700, with interest and costs to the plaintiff

Facts

From 1982 the plaintiff carried out construction work, including a Mercedes Benz assembly plant, workshops, a grease pit, houses and office blocks, on the defendant company's premises at Plot M 428 Jinja Road, Nakawa. The oral agreement provided that payment would be in US dollars and the defendant would supply materials. The parties never reduced the terms, amounts or timing of payment to writing, and payments were not acknowledged by receipts. From time to time the plaintiff, the defendant's general manager Kornmayer and the architect met to evaluate the work done, producing handwritten notes (Exhibits P1–P3). The plaintiff claimed a balance of US$253,700 remained owing after crediting US$50,000. The defendant denied the claim and asserted full payment, partly through money for the plaintiff's wife's ticket and the plaintiff's four-year occupation of the managing director's home, none of which was reduced to figures. The general manager Kornmayer did not testify, having gone to Europe. The trial judge dismissed the suit, finding the contract terms vague and the evidence of work and payment insufficient.

Issues

  1. Whether the trial judge erred in finding the agreed terms too vague and sketchy to constitute a valid, enforceable contract.
  2. Whether there was a breach of the contract by non-payment, and on whom the burden of proving payment lay.
  3. What remedy, if any, was available to the plaintiff for the breach, including the assessment of the amount due and interest.
  4. Whether the trial judge erred in dismissing the suit without any order as to costs and without giving reasons.

Orders

  • The appeal is allowed.
  • The case is remitted to the lower court for the judge to take evidence and make findings on the amount payable to the plaintiff after deducting from US$253,700 the cost of the ticket for the plaintiff's wife and the reasonable rent for the plaintiff's four-year use and occupation of the defendant's home.
  • An award is to be made to the plaintiff of the sum so found.
  • Interest is awarded at 30% on the amount awarded from 4 February 1986 until payment in full.
  • The cross-appeal on costs is allowed.
  • The plaintiff is awarded costs in the Supreme Court and in the court below.

Rules and key headnotes

Contract Law — Formation — Inference of agreement and enforceable terms from conduct
Where parties have not reduced their agreement to writing, the existence of an offer on definite terms and its acceptance, and hence a valid enforceable contract, may be inferred from the parties' conduct, and a court errs by confining itself to their words and documents while ignoring their conduct.
Evidence — Burden of proof — Payment as a matter of defence
Payment before action is a matter of defence that must be pleaded and proved by the defendant; once the plaintiff has established the contract and performance, the evidential burden of proving payment shifts to the defendant, and any vagueness or lack of precision in the evidence of payment must be held against the defendant.
Civil Procedure — Pleadings — Set-off and implied admission by failure to cross-examine
Although a set-off must be raised as a defence in the pleadings, where evidence of partial payment or settlement is admitted without objection and is not challenged in cross-examination, there is an implicit admission of the validity of that evidence which the court may act upon.
Civil Procedure — Costs — Judicial exercise of discretion and duty to give reasons
A successful litigant is, in the absence of special circumstances, entitled to costs; a trial judge who departs from this practice must exercise the discretion judicially and state the grounds for doing so, and a failure to give any reasons is an error.
Damages & Quantum — Breach of contract — Measure of damages and currency of payment
The ordinary remedy for breach of contract is damages sufficient to put the innocent party in the position he would have occupied had the contract been performed; where the agreed term was payment in a foreign currency, the court will not insert a term converting it at a rate other than the official Bank of Uganda rate.

Legislation cited (6)

Cases cited (4)

  • Brogden v Metropolitan Railway Co (1877) 2 App Cas 666
  • Constantine Steamship Line Ltd v Imperial Smelting Corp Ltd [1941] 2 All ER 165 (HL)
  • Travor Price v Raymond Kelsall (1957) EA 752
  • Donald Campbell & Co Ltd v Pollock [1927] AC 732

Full judgment

↓ Download PDF

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

Attorney General v Oriental Construction Co Ltd [1991] UGSC 15 (18 April 1991)
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.