Wakilii

Kaluuma Kassim and 4 Others v Kampala Capital City Authority (Civil Suit No. 313 of 2011)

High Court · [2012] UGHCCD 302 · 2012 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of employment contract and wrongful termination following dissolution of Kampala City Council by operation of law
Decision
Suit dismissed on preliminary objection — defence of frustration by operation of law maintained

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the employment contracts of members of the Kampala Local Government Public Accounts Committee were frustrated by operation of law when the Kampala Capital City Authority Act 2010 replaced Kampala City Council with a new entity under a different legal regime. The change was unforeseen, not provided for in the contracts, and rendered performance radically different from what was originally contemplated. The defence of frustration was upheld and the suit dismissed.

Outcome

Suit dismissed on preliminary objection — defence of frustration by operation of law maintained

Facts

The Plaintiffs were appointed as members of the Kampala Local Government Public Accounts Committee for a five-year term from 25 March 2009 to 30 March 2014 under the Local Governments Act Cap. 243. In March 2011, following enactment of the Kampala Capital City Authority Act 2010, Kampala City Council ceased to exist as a local government and was replaced by Kampala Capital City Authority accountable to central government. The Plaintiffs were required to hand over their instruments of office to the Executive Director of the new authority. They brought suit contesting termination of their contracts, seeking damages for breach of employment contract and wrongful termination for the unexpired term. The Defendant raised a preliminary objection that the contracts had been frustrated by operation of law.

Issues

  1. Whether the Plaintiffs' contracts of service had been frustrated by operation of law following the enactment of the Kampala Capital City Authority Act 2010 and the dissolution of Kampala City Council.

Orders

  • Preliminary objection upheld.
  • Civil Suit No. 313 of 2011 dismissed.
  • Each party to bear its own costs.

Rules and key headnotes

Contract Law — Frustration — Operation of Law — Test for Frustration
Frustration occurs when, without the fault of either party, a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract.
Contract Law — Frustration — Essential Factors for Establishing Frustration
Two essential factors must be established for frustration to occur: first, there must be an outside event or extraneous change of situation not foreseen or provided for by the parties at the time of contracting, which either makes performance impossible or renders it radically different from what the parties contemplated; second, the outside event and its consequences must have occurred without the fault or default of either party to the contract.
Contract Law — Frustration — Test for Application — Construction of Contract
To determine whether the doctrine of frustration applies, the court must first construe the contract to see whether the parties have themselves provided for the situation that has arisen; if they have provided for it, the contract must govern and there is no frustration. If they have not provided for it, the court must compare the new situation with the old situation and determine how different it is. The fact that performance has become more onerous or expensive is not sufficient; it must be positively unjust to hold the parties bound.
Employment & Labour — Employment Contracts — Frustration by Statute — Dissolution of Employer Entity
Where a new statute dissolves an employer entity and establishes a successor body under a different legal regime with different appointing procedures, employment contracts with the dissolved entity are frustrated by operation of law, even where the successor body has a committee performing similar functions, if the new appointing procedure is radically different and the contracts made no provision for such change.
Administrative Law — Statutory Transition — Transfer of Rights and Obligations — Effect on Existing Contracts
A statutory provision transferring rights, assets and obligations from a dissolved entity to its successor does not automatically preserve the services or employment contracts of employees or committee members where the new statute establishes different appointing procedures and the legislature has not made specific provision for the transfer of such services.
Contract Law — Frustration — Self-Induced Frustration — Operation of Law
A party cannot be said to have self-induced frustration where the frustrating event arises from operation of law and the party's hands are tied by statute; it would be unjust and illegal to enforce employment contracts of members of a defunct committee established under a repealed statute.

Legislation cited (8)

  • Local Governments Act Cap. 243 s.88
  • Kampala Capital City Authority Act 2010 s.58(1)
  • Kampala Capital City Authority Act 2010 s.85(1)
  • Kampala Capital City Authority Act 2010 s.85(4)
  • Kampala Capital City Authority Act 2010 s.85(5)
  • Kampala Capital City Authority Act 2010 s.85(6)
  • Constitution (Amendment) (No. 2) Act 2005 (Act No. 11 of 2005) cl.4
  • Constitution (Amendment) (No. 2) Act 2005 (Act No. 11 of 2005) cl.6

Cases cited (4)

  • Paal Wilson & Co. A/S v Partenreederei Hanna Blumenthal [1983] 1 All ER 34
  • Davis Contractors Ltd v Fareham Urban District Council [1956] 1 All ER 145
  • Tsakiroglou & Co. Ltd v Noblee & Thol G.M.B [1961] 2 All ER 179
  • Ocean Tramp Tankers Corporation v V/O Sovfracht [1964] 1 All ER 161

Full judgment

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

Kaluuma Kassim and 4 Others v Kampala Capital City Authority (Civil Suit No. 313 of 2011) [2012] UGHCCD 302 (15 November 2012)
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.