Wakilii

Partizanski and Anor v Sobetra (U) Ltd (HCT-00-CC-CS 1740 of 2000)

High Court · [2007] UGCOMMC 73 · 2007 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of dry lease agreement
Decision
Judgment entered for the plaintiffs with damages and costs. Defendant's counterclaim dismissed with costs.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that a dry lease agreement for construction equipment was extended beyond its expiry date but terminated when the lessor demanded return of the machinery on 20 June 2000. The defendant's failure to return the equipment until September 2001 was not excused by force majeure as general insecurity in Northern Uganda during an ongoing insurgency could not amount to an unforeseen event preventing performance. The court awarded the plaintiff US$279,575.71 for unpaid lease charges calculated at the agreed rates from lease commencement through to actual return of equipment, rejecting claims for lost earnings but granting interest at 11% per annum on arrears.

Outcome

Judgment entered for the plaintiffs with damages and costs. Defendant's counterclaim dismissed with costs.

Facts

Plaintiff No.1, a lessor of construction equipment, entered into a dry lease agreement dated 8 June 1999 with the defendant for a grader, wheel loader, and bulldozer at monthly rates totalling US$20,000. Plaintiff No.2 acted as agent and was entitled to 7% commission. The lease was extended by addendum to 31 March 2000. The parties agreed to a further extension under varied terms whereby payment for two machines would depend on actual utilisation. On 20 June 2000, Plaintiff No.1 demanded return of the machinery, but the defendant did not return it until 11 September 2001. The defendant claimed it could not return the equipment due to insecurity in Northern Uganda and that the machinery was mechanically unfit, incurring repair expenses for which it counterclaimed. The plaintiffs sought US$50,629.25 in arrears and US$455,727.10 for loss of earnings and additional charges.

Issues

  1. Whether, after the expiration of the lease, Plaintiff No.1 and the defendant mutually agreed upon an extension of the lease agreement for an indefinite period.
  2. Whether, when the lease expired in February 2001, force majeure (insecurity in Northern Uganda) prevented the return of the machinery from Gulu to Kampala.
  3. Whether the agreed hire charges were subject to the machinery being in a workable state.
  4. Whether the mode of payment was changed after the lease.
  5. Whether the defendant owes the plaintiffs the sums claimed.
  6. Whether the plaintiffs owe the defendants Shs.46,711,703 on the counterclaim.

Orders

  • Judgment entered for the plaintiffs.
  • Defendant to pay US$50,629.25 as arrears outstanding as at 31 March 2000.
  • Defendant to pay US$228,946.46 for the period 1 April 2000 to 11 September 2001.
  • Interest on US$50,629.25 at 11% per annum from 1 April 2000 to the date of judgment, thereafter at court rate until payment in full.
  • Interest on the balance of the decretal amount at court rate from the date of judgment until payment in full.
  • Plaintiffs entitled to costs of the suit.
  • Defendant's counterclaim dismissed with costs.

Rules and key headnotes

Contract Law — Lease Agreements — Termination — Notice by Lessor
A lessor may terminate an indefinite extension of a lease agreement by giving notice demanding return of the leased property, whereupon the lessee is obliged to demobilise and return the property within a reasonable time.
Contract Law — Force Majeure — Burden of Proof — Foreseeability
To succeed on a plea of force majeure or act of God, a party must prove that the preventing occurrence was due exclusively to natural causes of so extraordinary a nature that it could not reasonably have been foreseen and the results could not have been avoided by any reasonable action. General assertions of insecurity without particularity or detail are insufficient.
Contract Law — Force Majeure — Existing Conditions at Contract Formation
Where a state of war or insurgency existed at the time parties entered into a contract and throughout its performance, and a party took machinery into an affected area well aware of the conditions, the insurgency cannot be set up as a plea of force majeure to excuse liability without proof of additional unforeseen circumstances.
Contract Law — Variation of Terms — Implied Terms — Business Efficacy
Where parties vary an agreement such that payment for leased equipment depends on actual utilisation rather than fixed monthly rates, an implied term arises requiring the lessee to keep and submit a record of utilisation to give business efficacy to the variation.
Contract Law — Breach — Failure to Maintain Records — Liability
Where a lessee fails to keep or submit utilisation records as required by an implied term of a varied lease agreement, it is not unreasonable for the lessor to invoice according to the original fixed rates, and the lessee bears the burden of proving what was actually owed.
Commercial Law — Damages — Lost Earnings — Proof of Loss
A claim for lost earnings based on a third party's offer to hire equipment requires proof that the offered price was indicative of going market rates and that a contract would likely have been concluded. A single letter of offer, without more, is insufficient to establish lost probable income.
Commercial Law — Counterclaims — Credibility of Witnesses — Contradictory Testimony
Where a party's witnesses give contradictory testimony on a material fact central to a counterclaim—one stating repairs were never carried out and the other claiming extensive repairs—the credibility of both witnesses is fatally undermined and the counterclaim must fail for want of credible evidence.

Cases cited (1)

  • Ryde v Bushell and Another [1967] EA 817

Full judgment

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

Partizanski and Anor v Sobetra (U) Ltd (HCT-00-CC-CS 1740 of 2000) [2007] UGCommC 73 (12 September 2007)
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.