Wakilii

Lokhandwala v Hippo Industries Limited 2 Others (CIVIL SUIT NO 183 OF 2017)

High Court · [2020] UGHCCD 194 · 2020 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for unpaid employment entitlements arising from alleged breach of memorandum of understanding
Decision
Suit dismissed; neither party granted the remedies sought

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the memorandum of understanding governing the employment relationship was varied by subsequent conduct, including salary payment vouchers and remittances, reducing the plaintiff's salary from USD 3,500 to UGX 2,500,000 per month. The parol evidence rule applies to written contracts and extrinsic evidence cannot vary express written terms except where statutory exceptions apply. Variation by course of dealing is permitted under the Contracts Act 2010. The plaintiff failed to establish entitlement to unpaid salary, NSSF, or PAYE benefits. The defendants did not substantiate allegations of breach.

Outcome

Suit dismissed; neither party granted the remedies sought

Facts

The plaintiff was employed as operations manager of the first defendant company under a memorandum of understanding dated 19 December 2014. The MOU entitled him to a gross salary of USD 3,500 per month, 25% of net profit every six months, and 30 days paid holiday every two years. The plaintiff claimed unpaid salary of USD 52,795, NSSF benefits of over UGX 24,000,000, PAYE benefits of over UGX 19,000,000, and general damages. The defendants contended that the MOU was varied by subsequent correspondence and conduct, and that the plaintiff agreed to a new salary of UGX 2,500,000 per month as reflected in payment vouchers he signed and accounts he managed. The defendants alleged the plaintiff breached the MOU by failing in business operations, absconding from duty, and causing loss to the company. The plaintiff denied breach and testified he never agreed to vary the MOU.

Issues

  1. Whether the defendant is indebted to the plaintiff as claimed.
  2. Whether the plaintiff breached the memorandum of understanding.
  3. What remedies are available to the parties in the circumstances.

Orders

  • Suit dismissed.
  • Each party to bear its own costs.

Rules and key headnotes

Evidence — Parol Evidence Rule — Variation of Written Contract
Once parties have executed a written agreement, they are bound by its terms and extrinsic evidence cannot be admitted to add to, vary, or contradict the written instrument except where there is fraud, duress, illegality, lack of consideration, lack of capacity, or mistake.
Contract Law — Variation of Contract — Express Agreement or Course of Dealing
Under section 67 of the Contracts Act 2010, any right, duty, or liability arising under an agreement or contract may be varied by express agreement or by the course of dealing between the parties or by usage or custom binding both parties. Variation may be effected by oral or written agreement or by conduct where the evidence establishes on the balance of probabilities that the variation was agreed.
Contract Law — Variation by Conduct — Payment Vouchers and Remittances as Evidence
Payment vouchers bearing a party's signature coupled with NSSF and PAYE remittances reflecting a different salary structure, together with the party's concession in cross-examination, constitute sufficient evidence on the balance of probabilities that the parties varied the original written contract by course of dealing.
Evidence — Standard of Proof — Balance of Probabilities
The balance of probability standard means the court is satisfied an event occurred if it considers that, on the evidence, the occurrence was more likely than not. The inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities.

Legislation cited (1)

Cases cited (11)

  • D.S.S Motors Limited v Afri Tours And Travels Limited And Amin Tejani (HCT-00-CC-0012-2003)
  • Akugoba BodaBoda Transport Services Ltd And Another v Hajji Swaibu Kizito and Another (HCT-00-CC-CS-0501-2006 and HCT-00-CC-CS-0759-2006)
  • Future Stare Investments (U) Ltd v Nusuru Yusuf (Civil Suit No. 0012 of 2017)
  • Jacob v. Batavia and General Plantations Trust, (1924) 1 Ch. 287
  • Muthuuri v. National Industrial Credit Bank Ltd [2003] KLR 145
  • Robin v. Gervon Berger Association Limited And Others [1986] WLR 526
  • L'Strange vs Gracoub Ltd [1934] 2 KB 394
  • Jacobs vs Batavia & General Plantations Ltd [1924] 1 Ch. 287
  • Golf View Inn (U) Ltd v Barclays Bank (U) Ltd (Civil Suit No. 358 of 2009)
  • In re H (Minors) [1996] AC 563
  • Globe Motors Inc. & others v TRW Lucas Varity Electric Steering Limited & another 2016 EWCA Civ 396

Full judgment

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

Lokhandwala v Hippo Industries Limited 2 Others (CIVIL SUIT NO 183 OF 2017) 2020 UGHCCD 194 (18 September 2020)
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.