Wakilii

Premachandra and Another v Maximov (Civil Appeal No. 24 of 2002)

Court of Appeal · [2003] UGCA 44 · 2003 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court judgment for the respondent for money had and received, misrepresentation and breach of contract
Decision
Appeal partly allowed; general damages set aside; judgment entered for the respondent for USD 184,000 as money had and received with interest at 20%

Observed later treatment

Cited — treatment unverified cited in 1 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 1 time with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The Court of Appeal held that the joint venture agreement terminated automatically under clause 17 when the respondent failed to pay USD 42,000 within 30 days, and was not revived by the parties' conduct. The first appellant authored the fax (Exh PE8) which contained a valid offer and a false representation of large profits that induced the respondent's payment of USD 200,000. However, because the respondent, by his own conduct, made it impossible for the business to operate for even a year, he could not complain of breach or loss of profit. The general damages award of USD 275,000 was set aside. The appellants were ordered to refund USD 184,000 as money had and received, with interest at 20%.

Outcome

Appeal partly allowed; general damages set aside; judgment entered for the respondent for USD 184,000 as money had and received with interest at 20%

Facts

The respondent, a Russian businessman, came to Uganda to explore investment in the mining business. He was introduced to the first appellant, who claimed to own Shivam Ltd dealing in gold and diamonds. They executed a Participation Agreement (joint venture) on 9 June 1994 between Shivam Ltd and the respondent with two associates. The respondent was to deposit USD 42,000 within 30 days; clause 17 provided for automatic termination on non-payment. He remitted only USD 20,000 within the period. Later, on receipt of a fax (Exh PE8) promising profits of USD 20–25 million per year, the respondent remitted a further USD 200,000, which was received and credited to the appellants' account. When communication broke down and no shareholding or profit materialised, the respondent demanded return of his investment within a few months and sued the appellants for money had and received, misrepresentation and breach of contract.

Issues

  1. Whether the first appellant made false representations to the respondent on the strength of which he remitted USD 220,000.
  2. Whether the appellants received the USD 220,000.
  3. Whether the appellants breached the participation agreement (joint venture).
  4. Whether the joint venture agreement, having automatically terminated under clause 17, was revived by the subsequent conduct of the parties.
  5. What remedies, if any, the respondent is entitled to.

Orders

  • The award of general damages of USD 275,000 for breach of contract and costs thereon are set aside.
  • The order requiring the appellants to refund USD 20,000 (paid under the joint venture) is set aside as the appellants were not parties to that venture.
  • The appellants are ordered to refund USD 184,000 to the respondent as money had and received.
  • Interest awarded at 20% from August 1994 to date of payment in full (substituting the trial court's 6%).
  • Half of the costs as taxed awarded to the respondent in the Court of Appeal and in the High Court.

Rules and key headnotes

Contract Law — Automatic Termination Clauses — Effect of Non-Performance Within Stipulated Time
Where a contract provides for automatic termination if payment is not effected within a stipulated period, the contract comes to an end by operation of the clause on expiry of time, without any option to either party to decide whether or not to terminate.
Contract Law — Waiver of Contractual Rights — Requirements
A waiver of a stipulation in an agreement must, to be effectual, be made intentionally and with knowledge of the circumstances; the mere conduct of a party in applying funds after automatic termination does not amount to a revival of the terminated contract.
Contract Law — Misrepresentation — Whether Statement of Anticipated Profit is Actionable
A statement inducing investment on the expectation of substantial future profit constitutes a representation, but it is only rendered false where the profit fails to materialise; where a party by his own conduct makes it impossible for the business to operate long enough to assess its performance, he cannot complain that the representation was false.
Company Law — Separate Legal Personality — Liability of Company Distinct from Members
A limited liability company has a separate corporate identity distinct from the persons who incorporated it, so individuals cannot be ordered to refund money paid to and received by the company under an agreement to which they were not parties.
Contract Law — Money Had and Received — Recovery of Investment on Failure of Consideration
Where money is received by a party but the consideration or purpose for which it was paid fails, the payer is entitled to recover it as money had and received, subject to deduction of any sums already returned.

Cases cited (2)

  • The Earl of Darnley Vrs The Proprietors, of London, Chatham and Dover [1867] LR 2 HL
  • Salomon v Salomon & Co Ltd [1897] AC 22

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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

Premachandra and Another v Maximov (Civil Appeal No. 24 of 2002) [2003] UGCA 44 (30 June 2003)
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.