Wakilii

BuildTrust Construction (U) Limited v Rugasira (HCT-00-CC-CS 288 of 2005)

High Court · [2008] UGCOMMC 85 · 2008 Judgment for Plaintiff; Counterclaim Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of unpaid construction costs with counterclaim for damages for breach of contract
Decision
Plaintiff's claim substantially allowed with award of unpaid contract sum and damages. Defendant's counterclaim partly allowed with award for rental loss due to delay and general damages for breach.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A fixed-price construction contract may be varied by oral instructions where both parties continue performance despite the variations. The common law will impose a quasi-contract requiring payment for renovation work done and accepted outside the strict contractual parameters. Where parties commission an independent expert to value disputed variations, courts will promote reconciliation by enforcing that valuation unless there is good reason not to do so. Delay caused by ordering additional works sets the completion time at large, requiring performance within a reasonable time, not the original contractual deadline.

Outcome

Plaintiff's claim substantially allowed with award of unpaid contract sum and damages. Defendant's counterclaim partly allowed with award for rental loss due to delay and general damages for breach.

Facts

By written contract dated 20 June 2002, the defendant contracted the plaintiff to renovate her residential house at Plot 13 Luthuli Avenue, Bugolobi, Kampala for a fixed price of UGX 115,000,000 over five months. The defendant gave numerous verbal instructions for variations during performance, increasing the scope and cost of work. The plaintiff presented a final bill of UGX 220,696,325, which the defendant rejected as unreasonably high. The defendant commissioned independent valuers M/S Barker, Barton & Lawson (BBL) who valued the work at UGX 198,832,579. The plaintiff accepted this valuation. The plaintiff had been paid UGX 135,500,000, leaving a balance of UGX 63,353,571. The renovation was completed ten months late. The defendant counterclaimed for rental loss and costs of completing allegedly unfinished work. The defendant immediately rented the completed house to Uganda Telecom Limited at USD 2,000 per month.

Issues

  1. Whether the contract was varied in respect to works to be carried out and if so to what extent?
  2. Whether the plaintiff is entitled to the reliefs sought?
  3. Whether the plaintiff (defendant by the counterclaim) is in breach of contract?
  4. Whether the defendant (plaintiff by the counterclaim) is entitled to the relief sought?

Orders

  • Plaintiff awarded UGX 63,353,571 being outstanding contract sum.
  • Plaintiff awarded UGX 6,000,000 as general damages for inconvenience.
  • Interest at 23% per annum on the outstanding amount from 24 July 2004 until payment in full.
  • Interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff awarded costs of the main suit.
  • Defendant awarded USD 12,000 (or Uganda Shillings equivalent at prevailing commercial bank exchange rate) for loss of rental income due to delay.
  • Defendant awarded UGX 2,000,000 as general damages for delay.
  • Interest at 4% per annum on USD 12,000 from 9 March 2003 until payment in full.
  • Interest at 8% per annum on general damages from date of judgment until payment in full.
  • Defendant awarded costs of the counterclaim.

Rules and key headnotes

Contract Law — Variation of Written Contracts — Oral Instructions — Continued Performance
Where a written construction contract provides that variations must be in writing, but both parties continue performance following oral instructions for additional work, and the employer accepts and retains the benefit of that work, the contract is varied by conduct notwithstanding the written variation clause.
Contract Law — Restitution — Quasi-Contract — Unjust Enrichment
Where renovations are done at a house and accepted by the house owner outside the parameters of the renovation contract, the common law will impose a quasi-contract requiring the owner to pay for those renovations, as a civilised system of law cannot permit a person to retain a benefit without compensation on grounds that it falls outside contractual terms.
Commercial Law — Construction Contracts — Independent Expert Valuation — Promotion of Reconciliation
Where parties to a construction dispute commission a reputable third party expert to value disputed works and both parties accept that valuation, courts will promote reconciliation by giving effect to the expert determination unless there is good reason not to do so, consistent with the constitutional duty to promote reconciliation between parties under Article 126(e) of the Constitution.
Contract Law — Construction Contracts — Time for Performance — Variations Setting Time at Large
When additional work is ordered under a construction contract, the original completion time is set at large, but the contractor remains under an obligation to complete the work within a reasonable time. The reasonable completion time is determined by reference to the contractor's revised completion dates proposed during performance and accepted or not protested by the employer.
Damages & Quantum — Special Damages — Proof — Loss of Rental Income
A claim for loss of rental income due to delay in completing construction work is recoverable as special damages where there is evidence that the property was immediately rented out after completion, establishing that the loss was foreseeable and quantifiable. The period of compensable delay is measured from the reasonable completion time, not the original contractual completion date where that time has been set at large by variations.

Legislation cited (1)

Cases cited (4)

  • Mujuni Ruhemba v Shansha Jensen (U) Ltd (Court of Appeal No. 56 of 2000)
  • [1943] AC 32
  • Muhammed Mohammed Al Hassan v Ibrahim Al Gasim (High Court Civil Suit No. 504 of 2005)
  • [1959] EA 1071

Full judgment

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

BuildTrust Construction (U) Limited v Rugasira (HCT-00-CC-CS 288 of 2005) [2008] UGCommC 85 (23 January 2008)
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.