Wakilii

Liberty Construction Company Ltd v Dr. Daniel Onen Kaitaita (HCCS 1 of 2011)

High Court · [2016] UGCOMMC 18 · 2016 Plaintiff's Claim Dismissed; Counterclaim Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for special and general damages arising out of contractual dispute and alleged wrongful retention of excavator; counterclaim for balance of contract proceeds.
Decision
Plaintiff's claim for breach of contract and excavator repair costs dismissed save for demobilisation costs. Defendant succeeded on counterclaim for balance of contract proceeds and general damages arising from wrongful blockage of bank account.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held: The Defendant did not breach the payment obligation as the Plaintiff itself blocked the account before funds arrived, preventing the Defendant from fulfilling his obligations. The Defendant was entitled to retain the excavator as the contract was extended beyond 15 December 2010. The Plaintiff lacked locus standi to claim repair costs because the excavator agreement was between Edmund Mabiro (personally) and the Defendant, not the Plaintiff. The Defendant was entitled to the balance of contract proceeds (UGX 15,268,243) and general damages of UGX 40 million for the Plaintiff's wrongful actions, including blocking the account and instituting malicious criminal proceedings.

Outcome

Plaintiff's claim for breach of contract and excavator repair costs dismissed save for demobilisation costs. Defendant succeeded on counterclaim for balance of contract proceeds and general damages arising from wrongful blockage of bank account.

Facts

The Plaintiff construction company and Defendant entered into a proceeds-sharing agreement on 5 October 2010 whereby the Defendant took over the Bushenyi ARDC construction project. The Defendant was to be paid UGX 88,531,262 and was appointed sole signatory to a Centenary Bank account to receive contract payments from the Ministry of Agriculture. From this account, UGX 141,334,582 was to be remitted to the Plaintiff's DFCU account upon first payment. The Defendant issued standing instructions to the bank for remittance on 4 November 2010. Before payment arrived (14 December 2010), the Plaintiff blocked the account, removed the Defendant as director and signatory, and reported him to police for attempted theft. UGX 156,554,825 was credited on 14 December 2010; UGX 82,722,897 was debited by Uganda Revenue Authority under a third-party notice. The Plaintiff subsequently filed suit claiming the Defendant breached the payment obligation and wrongfully retained an excavator used on the project. The Defendant counterclaimed for the balance of funds on the account.

Issues

  1. Whether the Defendant breached his obligation to pay the sum of Uganda shillings 141,334,582/= to the Plaintiff in accordance with the agreement between the two?
  2. Whether the Plaintiff prevented the Defendant from accessing the funds received under the contract, and transferring the same to the Plaintiff as agreed?
  3. Whether the Defendant wrongfully continued to retain the excavator after completion of the performance of the contract?
  4. Whether the Plaintiff wrongfully neglected/refused/failed to remit the balance of the monies received from Centenary Bank to the Defendant?
  5. Whether the Plaintiff is entitled to the remedies sought in the plaint?
  6. Whether the Defendant is entitled to the remedies sought in the counterclaim?
  7. Quantum of damages if any?

Orders

  • Plaintiff's claim for UGX 67,502,654 dismissed.
  • Plaintiff awarded UGX 2,800,000 and UGX 500,000 for demobilisation costs.
  • Interest awarded to Plaintiff on demobilisation costs at 21% per annum from July 2011 to judgment, and thereafter until payment in full.
  • Rest of Plaintiff's suit dismissed with costs.
  • Defendant's counterclaim succeeds in part.
  • Defendant awarded UGX 15,268,243 being balance of contract proceeds.
  • Interest awarded to Defendant on UGX 15,268,243 at 21% per annum from 14 December 2010 to judgment, and thereafter until payment in full.
  • General damages of UGX 40,000,000 awarded to Defendant.
  • Interest on general damages at 21% per annum from judgment until payment in full.
  • Defendant's counterclaim awarded with costs.

Rules and key headnotes

Contract Law — Breach of Contract — Prevention of Performance by Party Seeking to Enforce
A party to a contract who by his own actions prevents the other party from performing a contractual obligation cannot succeed in a claim for breach of that obligation. Where a plaintiff removed the defendant as sole signatory to a bank account and blocked the account before funds arrived, the plaintiff's own conduct prevented the defendant from fulfilling his obligation to remit funds and the breach claim must fail.
Contract Law — Third Party Rights — Contracts Act 2010 s.65
Under the Contracts Act 2010 section 65, a person not a party to a contract may enforce a term if the contract expressly so provides or if a term confers a benefit on that person, unless on proper construction the parties did not intend the term to be enforceable by the third party. A company seeking to enforce terms of an agreement made between its director (in his personal capacity) and the defendant lacks locus standi where the agreement clearly intended the director personally, not the company, to be the beneficiary.
Evidence — Estoppel — Doctrine of Approbation and Reprobation — Evidence Act Cap. 6 s.114
Under the doctrine of estoppel (Evidence Act s.114), a party who has taken full advantage of an agreement cannot subsequently deny the obligations arising under that agreement. A party who accepted benefits under a proceeds-sharing agreement cannot later evade obligations by denying the validity of the arrangements he himself entered into.
Evidence — Admissibility — Oral Evidence to Vary Written Instrument
Oral evidence cannot be admitted or used to add to, vary, or contradict the terms of a written instrument. Where written undertakings clearly set out contractual obligations, oral evidence adduced to the contrary must be disregarded.
Civil Procedure — Interlocutory Orders — Mandatory Injunction — Conclusiveness of Findings
A finding of fact made by a court in granting a mandatory injunction on an interlocutory application is not conclusive at trial. Where the court finds a prima facie case or an arguable case on affidavit evidence not tested by cross-examination, the parties are entitled to adduce further evidence at trial to rebut that finding.
Contract Law — Damages — General Damages — Measure of Compensation
An award of general damages is compensatory. The innocent party is to be placed, so far as money can do so, in the same position as if the contract had been performed. Where a party's conduct caused delay, inconvenience, and damage to reputation including malicious criminal complaints, general damages are appropriate compensation.

Legislation cited (9)

Cases cited (9)

  • Harrington v Wells [1966] 3 All ER 524
  • Mumbai International Airport Pvt Ltd v Golden Chariot Airport (Civil Appeal No. 8201 of 2010) (Supreme Court of India)
  • Green Boat Entertainment Ltd v City Council of Kampala [2007] 2 HCB 81
  • Mpungu and Sons Transporters Ltd v Attorney General [2006] 1 HCB 26
  • Margaret, Duchess of Argyll v Duke of Argyll [1965] 1 All ER 611
  • Giella v Cassman Brown and Company Ltd [1973] EA 358
  • Noormohamed Janmohamed v Kassamali Virji Madhani [1963] 1 EACA 8
  • Makula International v Cardinal Nsubuga [1982] HCB 11
  • Johnson v Agnew [1979] 1 All ER 883

Full judgment

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

Liberty Construction Company Ltd v Dr. Daniel Onen Kaitaita (HCCS 1 of 2011) [2016] UGCommC 18 (1 March 2016)
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.