Wakilii

H.N. Developers Limited v Aminbhai Thakkar (Civil Suit 463 of 2018)

High Court · [2021] UGCOMMC 193 · 2021 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of construction contract and recovery of outstanding payments
Decision
Judgment entered for the plaintiff for US$ 85,000 plus interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that the parties entered into a fresh contract adjusting the contract price from US$ 410,000 to US$ 445,000 to account for variations instructed by the defendant. The plaintiff was entitled to US$ 35,000 for extra works under the revised contract and US$ 50,000 on quantum meruit for additional works outside the original scope. The plaintiff breached the contract by failing to achieve practical completion due to omission of plumbing works and was therefore not entitled to the 5% retention sum of US$ 20,000. The defendant breached the contract by unilaterally reducing monthly instalments and failing to pay for extra and additional works. Judgment was entered for the plaintiff for US$ 85,000 plus interest at 8% per annum from the date of filing suit.

Outcome

Judgment entered for the plaintiff for US$ 85,000 plus interest and costs

Facts

On 16th October 2012, the plaintiff construction company contracted with the defendant to construct a residential apartment block at plot 239, Bulange-Mengo for US$ 410,000, payable in instalments of US$ 18,000 twice monthly, with completion within twelve months. During construction, the defendant instructed material alterations including eight additional washrooms, eight additional stores, and extended balconies. The defendant also unilaterally reduced monthly instalments to US$ 10,000 from July 2013. By December 2013, the parties negotiated an extension to March 2014 and agreed to a revised contract price of US$ 445,000 to account for variations. The plaintiff executed additional works including a retaining wall, rainwater channels, and planters valued at US$ 50,000. By March 2015, the plaintiff had substantially completed the works except for plumbing. The defendant paid US$ 390,000 in total, leaving US$ 105,000 outstanding comprising US$ 35,000 for extra works under the revised contract, US$ 50,000 for additional works, and US$ 20,000 retention.

Issues

  1. Whether the plaintiff and/or the defendant breached their obligations under the contract of 16th October 2012.
  2. Whether the parties entered into a fresh contract in respect of extra works.
  3. Whether the defendant owes the plaintiff US$ 105,000.
  4. What remedies are available to the parties?

Orders

  • Judgment entered for the plaintiff against the defendant.
  • The defendant to pay the plaintiff US$ 35,000 as outstanding under the revised contract for extra works.
  • The defendant to pay the plaintiff US$ 50,000 as outstanding on the basis of quantum meruit for additional works.
  • Interest on the above sums at the rate of 8% per annum from 19th June 2018 until payment in full.
  • The defendant to pay the costs of the suit.

Rules and key headnotes

Contract Law — Construction Contracts — Incorporation of Documents by Reference
For a document to be incorporated into a contract by reference, there must be a clear manifestation of intent to incorporate it. The document must be adequately described in the contract, and reasonable steps must be taken before or at the time of the contract to bring its existence to the notice of the other party. A 3D artistic impression prepared for marketing purposes that is not referenced in the contract, not attached to it, and not shown to the contractor before or at the time of contracting does not form part of the contract.
Contract Law — Construction Contracts — Variations — Lump Sum Contracts
In a lump-sum construction contract, a variation is work not expressly or impliedly included in the work for which the lump sum is payable. Variations that materially change the contract sum, such as the addition of eight bathrooms and eight stores not shown in the approved building plan, are not minor changes but constitute variations requiring agreement supported by consideration. Multiple email correspondences exchanged between the parties can be combined to satisfy the writing requirement for contract variation where they show offer, acceptance, and agreement on the scope and cost of additional works.
Contract Law — Construction Contracts — Time of the Essence — Extension and Waiver
Where a construction contract fixes a completion date but does not expressly make time of the essence, and the employer continues to make payments and accept work substantially beyond the original and extended completion dates without giving notice fixing a new date and making time of the essence, the employer waives strict adherence to the time stipulated and cannot thereafter claim breach for delay. A party cannot terminate a contract or claim damages for delay if by his own conduct, such as ordering extra work or unilaterally reducing agreed instalments, he renders it impossible or impracticable for the contractor to meet the deadline.
Contract Law — Construction Contracts — Practical Completion — Defects
Practical completion in a construction contract means completion of all construction work free from patent defects other than trifling ones. It is the stage at which the works are sufficiently complete that the owner can occupy or use them for their intended purpose. A residential building cannot be deemed practically complete without plumbing in place, as the absence of plumbing is a patent defect that prevents the building from being used as intended and cannot be ignored as trifling. Failure to achieve practical completion due to omission of plumbing constitutes breach of contract.
Contract Law — Quantum Meruit — Extra Works Outside Contract Scope
Where a contractor performs work beyond the scope of a written contract, the contractor may recover on the basis of quantum meruit if the employer had actual knowledge of the extra works as they were being done, knew that they were outside the contract, and knew that the contractor expected to be paid for them as extras. The fact that a contract contains no provision for extra work does not prevent recovery for the fair value of work performed beyond the scope of the contract, including reasonable overhead and profit.
Contract Law — Construction Contracts — Retention Money — Entitlement
The purpose of retention money in a construction contract is to ensure that the contractor properly completes the activities required under the contract. It acts as security: if defects are left by the contractor that they fail to remedy, the money is rightfully retained by the employer to fix those defects. A contractor who fails to achieve practical completion due to patent defects such as omission of plumbing works is not entitled to recover the retention sum.

Legislation cited (6)

Cases cited (35)

  • Parker v South Eastern Railway Company (1877) 2 CPD 416
  • Olley v Marlborough Court Ltd [1949] 1 KB 532
  • Carroll Const. Co. v. Smith, 37 Wash. 2d 322, 223 P. 2d 606 (1950)
  • Wood v Capita Insurance Services Ltd [2017] AC 1173
  • Gilbert v Knight [1968] 2 All ER 248
  • Williams v Fitzmaurice (1858) 3 H & N 844
  • Kemp v Rose (1858) 65 ER 910
  • Weldon v Commission for New Towns [2000] BLR 496
  • Alstom Combined Cycles Ltd v Henry Boot Plc [2001] EWHC Technology 428
  • United Scientific Holdings Ltd v Burnley BC [1978] AC 904
  • Charles Rickards Ltd v Oppenheim [1950] 1 KB 616
  • Behzadi v Shaftsbury Hotels [1992] Ch 1
  • Raineri v Miles [1981] AC 1050
  • Astea (UK) Ltd v Time Group Ltd [2003] EWHC 725 (TCC)
  • Hick v Raymond and Reid [1893] AC 22
  • Shawton Engineering Ltd v DGP International Ltd [2005] EWCA Civ 1359
  • Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No 2) [2007] EWHC 447 (TCC)
  • Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601
  • Dawnays Ltd v FG Minter and Trollope and Coles Ltd [1971] 1 WLR 1205
  • Mears Ltd v Costplan Services (South East) Ltd [2019] 4 WLR 55
  • Westminster Corp v J Jarvis & Sons Ltd [1970] 1 WLR 637
  • University of Warwick v Balfour Beatty Group Ltd [2018] EWHC 3230
  • Molloy v Liebe (1910) 102 LT 616
  • Borham-Carter v Hyde Park Hotel [1948] 64 TLR
  • Masaka Municipal Council v. Semogerere [1998-2000] HCB 23
  • Musoke David v. Departed Asians Property Custodian Board [1990-1994] E.A. 219
  • Kyambadde v. Mpigi District Administration, [1983] HCB 44
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Gapco (U) Ltd v AS Transporters (U) Ltd (Court of Appeal Civil Appeal No. 18 of 2004)
  • Mascareignes Sterling Co Ltd v Chang Cheng Esquares Co Ltd [2016] UKPC 21
  • Mohanlal Kakubhai Radia v Warid Telecom Ltd (High Court Civil Suit No. 234 of 2011)
  • Kinyera v Management Committee of Laroo Boarding Primary School (High Court Civil Suit No. 099 of 2013)
  • Carmichael v Caledonian Railway Co (1870) 8 M (HL) 119
  • Riches v Westminster Bank Ltd [1947] 1 All ER 469
  • Dodika Limited v United Luck Group Holdings Limited [2020] EWHC 2101 (Comm)

Full judgment

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H.N. Developers Limited v Aminbhai Thakkar (Civil Suit 463 of 2018) [2021] UGCommC 193 (27 December 2021)
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.