Wakilii

Lakeville Investments Limited v MAT & Spencer Limited (Civil Suit 960 of 2018)

High Court · [2023] UGCOMMC 243 · 2023 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract, reputational damage, and economic loss
Decision
Plaintiff's claim for breach of contract partially allowed with declaration of breach and nominal damages; claims for reputational damage, economic loss, and exemplary damages dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court found that an oral contract between the parties for land subdivision services was valid and binding despite exceeding the threshold requiring written contracts under s.10(5) of the Contracts Act 2010. The defendant breached the contract by failing to complete the work within 59 working days, but the plaintiff also breached by failing to complete payment. The defendant's breach did not cause the plaintiff's reputational damage or economic loss, as the plaintiff had sold plots to customers before entering the contract. Nominal damages of UGX 1,000,000 were awarded. Each party to bear their own costs.

Outcome

Plaintiff's claim for breach of contract partially allowed with declaration of breach and nominal damages; claims for reputational damage, economic loss, and exemplary damages dismissed

Facts

The plaintiff undertook a development project on 100 acres of land and engaged the defendant to subdivide and title 185 plots. The defendant quoted for the work, agreeing to complete it in 59 working days. The plaintiff paid UGX 35,000,000 initially, then an additional UGX 10,000,000, totalling UGX 45,000,000 out of a total contract value of UGX 123,600,000. The defendant failed to complete the work within 59 working days. The plaintiff had already sold plots to customers from 2015 onwards, before entering this contract in December 2017. Customers complained and some terminated their purchase agreements. The defendant claimed delays were caused by backlog at Mukono Land Office and that the plaintiff's failure to pay the full contract sum contributed to delays. The deed prints were finally delivered in April 2019.

Issues

  1. Whether there was a valid and binding contract between the parties for the delivery and completion of work as stipulated in a quotation within 59 working days.
  2. Whether the Defendant breached the terms of that contract.
  3. Whether the Defendant's actions occasioned loss of reputation and economic loss to the Plaintiff.
  4. What remedies are available to the parties.

Orders

  • A declaration is issued that the Defendant was in breach of its contract with the Plaintiff.
  • No declaration is made that the Plaintiff suffered reputation damage and economic loss as a result of the Defendant's breach.
  • Nominal damages of UGX 1,000,000 awarded to the Plaintiff.
  • Prayer for exemplary damages dismissed.
  • No interest awarded on general damages.
  • Each party to bear their own costs of the suit.

Rules and key headnotes

Contract Law — Formation — Validity of Oral Contracts — Contracts Exceeding Currency Point Threshold
An oral contract whose subject matter exceeds twenty-five currency points may be valid and binding where the parties have partially performed their obligations under the contract, notwithstanding the requirement under s.10(5) of the Contracts Act 2010 that such contracts must be in writing.
Contract Law — Breach — Cross Breach by Both Parties — Effect on Remedies
Where both parties to a contract have breached their respective obligations, the party seeking remedies must come to equity with clean hands. A plaintiff who has not fully executed its obligations under a contract may succeed in establishing breach but will only be entitled to nominal damages rather than substantial damages.
Contract Law — Damages — Causation — Reputational Damage and Economic Loss
To establish liability for reputational damage and economic loss arising from breach of contract, there must be a direct causal link between the defendant's actions and the loss suffered. Where a plaintiff had entered into agreements with customers before contracting with the defendant, the defendant's breach cannot be the cause of losses arising from those pre-existing customer agreements.
Contract Law — Damages — Nominal Damages — Circumstances for Award
Nominal damages are appropriate where a plaintiff's contractual rights have been infringed but the plaintiff has not sustained actual damage, or where any damage arises partly from the plaintiff's own conduct. An award of nominal damages recognises the breach without compensating for substantial loss.

Legislation cited (4)

Cases cited (8)

  • Greenboat Entertainment Ltd v City Council of Kampala (High Court Civil Suit No. 580 of 2003)
  • Ronald Kosi Asante v Shell Uganda Limited (High Court Civil Suit No. 542 of 2006)
  • Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] 2 ALL ER
  • Angwee v Odongo & Another (Civil Suit No. 65 of 2011)
  • Uganda Commercial Bank v Deo Kigozi [2002] EA 293
  • James Fredrick Nsubugo v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Fredrick Zaabwe v Orient Bank & 5 Others [2007] HCB Vol. 29
  • Muniji Narm Pstel v Noor Essa and another [1965] 1 EA 484

Full judgment

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

Lakeville Investments Limited v MAT & Spencer Limited (Civil Suit 960 of 2018) [2023] UGCommC 243 (15 December 2023)
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.