Wakilii

Gulam v Yusuf (Civil Appeal No. 21 of 1945)

East African Court of Appeal · [1946] EACA 6 · 1946 Appeal Dismissed, Damages Awarded AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from decision of H.M. Supreme Court of Kenya in a breach of contract action
Decision
Appeal dismissed, cross-appeal allowed, damages of Sh. 1,500 awarded to respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The doctrine of frustration does not apply where it is the defendant's breach of contract, not an external supervening event, that renders performance impossible. Damages representing rental savings are recoverable where the defendant knew the plaintiff's intentions at the time of contracting. The burden of proving failure to mitigate lies on the defendant.

Outcome

Appeal dismissed, cross-appeal allowed, damages of Sh. 1,500 awarded to respondent

Facts

On 7 November 1940, Alibhai Gulam agreed to lease three shops to Mohamed Yusuf for 11 months from 1 January 1941 at Sh. 290 per month. Gulam knew Yusuf intended to transfer his butchery business from the Municipal Market (where he paid Sh. 237.50 monthly) to one shop and sub-let the other two for Sh. 194 monthly. Gulam failed to give possession on 1 January 1941. The tenant remained in occupation and Gulam took no ejectment proceedings. On 10 June 1941, rent restriction legislation was applied to the premises retrospectively from 1 January 1941. Yusuf sued for damages representing his rental savings over 11 months (Sh. 1,500). Gulam defended on the ground of frustration by the retrospective legislation. The Magistrate found breach of contract but awarded only nominal damages of Sh. 1, holding the claimed damages too remote.

Issues

  1. Whether the doctrine of frustration applies where a party's own breach of contract precedes a supervening event that would otherwise render performance impossible.
  2. Whether damages representing the difference in rental costs are too remote to be recoverable where the defendant knew the plaintiff's intention to save rent by moving premises.
  3. Whether a plaintiff must mitigate damages by seeking alternative premises after breach of a lease agreement.

Orders

  • Appeal dismissed.
  • Cross-appeal allowed.
  • Judgment for the respondent in the sum of Sh. 1,500 substituted for Sh. 1.
  • Costs in the Court of Appeal to follow the event, restricted in accordance with the parties' agreement dated 20th December 1945.
  • Order for costs in the first appeal set aside and order giving the plaintiff-appellant the costs of the appeal substituted.
  • Order for costs before the Magistrate to stand.

Rules and key headnotes

Contract Law — Frustration — Breach Preceding Supervening Event
The doctrine of frustration does not apply where it is a party's breach of contract, and not an external supervening event for which neither party is responsible, that renders performance impossible. A party cannot invoke frustration to excuse liability for a breach that occurred before the allegedly frustrating event.
Contract Law — Frustration — Retrospective Legislation
Retrospective legislation cannot cure a breach of contract that has already occurred and continued for months before the legislation came into force. Each party must fulfil contractual obligations up to the moment when impossibility supervenes.
Damages & Quantum — Remoteness — Contemplation of Parties
Damages are not too remote where they arise naturally from the breach or were reasonably in the contemplation of both parties at the time of contracting. Where special circumstances are communicated to and known by the defendant, damages resulting from breach under those circumstances are recoverable.
Damages & Quantum — Assessment — Rental Savings
Where a defendant knew the plaintiff intended to save rent by moving premises, damages representing the difference in rental costs are the proper measure of loss and are not too remote. Speculation about whether the plaintiff's business profits would have increased or decreased in the new premises is irrelevant where no claim for loss of profits is made.
Damages & Quantum — Mitigation — Burden of Proof
Where a defendant seeks to have damages mitigated on the ground that the plaintiff could have obtained alternative premises, the burden lies on the defendant to plead and prove that the plaintiff could and reasonably should have obtained such premises. It is not for the plaintiff to prove the negative.

Legislation cited (1)

  • Increase of Rent and Mortgage Interest (Restrictions) Ordinance, 1940

Cases cited (6)

  • Fibrosa v Fairbairns Lawson Combe Barbour Ltd (1942) 1 All ER 122
  • Hirji Mulji v Cheong Yue Steamship Co [1926] AC 497
  • Simpson v London and North Western Railway Co (1876) 1 QBD 274
  • Hadley v Baxendale (1854) 23 LJ Ex 179
  • Roper v Johnson (1873) 28 LT 296
  • Michael v Hart [1902] 1 KB 482

Full judgment

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

Gulam v Yusuf (Civil Appeal No. 21 of 1945) [1946] EACA 6 (1 January 1946)
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.