Wakilii

Karia and Company Limited v Dhamani (Civil Appeal No. 45 of 1968)

East African Court of Appeal · [1969] EACA 1 · 1969 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from High Court of Kenya judgment in civil suit for breach of contract
Decision
Appeal dismissed; cross-appeal allowed. Sellers held liable for breach of contract.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal dismissed the appeal and allowed the cross-appeal. The export licence was validly cancelled by the Ministry. However, the contract was not frustrated because the sellers failed to take reasonable steps to obtain a new licence and prematurely repudiated the contract by treating it as cancelled. The sellers' refusal to deliver constituted a wrongful repudiation entitling the buyers to damages for breach of contract.

Outcome

Appeal dismissed; cross-appeal allowed. Sellers held liable for breach of contract.

Facts

The appellant sellers in Kampala contracted to sell 50 tons of Uganda mixed beans to the respondent buyers in Thika, Kenya, at 35/- per bag f.o.r. Kampala for delivery in February/March 1967. Export of beans from Uganda required a ministerial licence. On 2 March 1967, the Ministry of Commerce and Industry cancelled all unutilised export licences including the sellers' licence for 50 tons of beans to Kenya, citing protection of Uganda's food situation. On 10 March, the sellers informed the buyers that the contract was cancelled. The buyers responded by instructing the sellers to deliver the goods to Garden Fresh Ltd. in Kampala against payment. The sellers refused, stating they could not deliver in Uganda. The buyers sued for breach of contract. The trial judge found for the buyers. The sellers appealed, arguing frustration and that the buyers' instructions were incompatible with an f.o.r. contract.

Issues

  1. Whether the cancellation of the export licence by the Ministry of Commerce and Industry was valid.
  2. Whether the contract was frustrated by the cancellation of the export licence.
  3. Whether the sellers were entitled to refuse delivery of goods to the buyers' nominee in Kampala under an f.o.r. Kampala contract.
  4. Whether the sellers took reasonable steps to obtain a new export licence after cancellation.

Orders

  • Appeal dismissed with costs.
  • Cross-appeal allowed with costs.
  • One bill of costs only.

Rules and key headnotes

Administrative Law — Ministerial Acts — Validity of Official Communications
A communication emanating from a Ministry and signed by an official on behalf of the Permanent Secretary must, until the contrary is proved, be taken to be the act of the Minister and to convey the Minister's decision. A Minister cannot do everything personally and must act through other officials of the Ministry.
Contract Law — F.O.R. Contracts — Place of Delivery — Waiver
A condition in a contract relating to the place of delivery enures for the benefit of both parties and cannot be waived by one party without the consent of the other. Where a contract provides for delivery f.o.r. (free on rail) at a named place, neither party can unilaterally change the mode of delivery.
Contract Law — Frustration — Export Licences — Duty to Obtain Licence
Where a contract requires an export licence and the licence is cancelled, the party under a duty to obtain the licence must take all reasonable steps to obtain a new licence. Where a person fails to take such steps and puts forward as an excuse that any application would have failed, a heavy onus is cast on that person to prove that any application would have been foredoomed to failure.
Contract Law — Frustration — Temporary Prohibition — Burden of Proof
Where an export licence is cancelled as a temporary precautionary measure and there is evidence that similar licences were subsequently granted, it cannot be said that any representation to the Minister for a new licence would have been foredoomed to failure. The party claiming frustration bears the burden of proving that performance became impossible.
Contract Law — Repudiation — Premature Cancellation
Where a seller treats a contract as cancelled immediately upon cancellation of an export licence without attempting to obtain a new licence or exploring alternative means of performance, such conduct amounts to a wrongful repudiation of the contract entitling the buyer to damages for breach.

Legislation cited (1)

Cases cited (2)

  • Maine Spinning Co. v. Sutcliffe & Co. (1916-17) All E.R. Rep. 539
  • Karachi Gas Co. Ltd. v. Issag (1965) E.A. 42

Full judgment

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

Karia and Company Limited v Dhamani (Civil Appeal No. 45 of 1968) [1969] EACA 1 (21 March 1969)
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.