Wakilii

Reenboog Construction Services Ltd v Aevar Engineering Services Ltd (Civil Suit No. 728 of 2019)

High Court · [2022] UGCOMMC 56 · 2022 Judgment for Plaintiff; Counterclaim Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of construction subcontract with counterclaim
Decision
Judgment for plaintiff on main claim with damages awarded; counterclaim partly allowed with general damages awarded to defendant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that both parties breached the subcontract. The defendant breached by failing to pay UGX 168,417,325 for 96% of Phase 1 works completed and by removing the plaintiff's managing director as a co-signatory before full payment. The plaintiff breached by failing to complete works by the extended deadline of 6 June 2019. The defendant was ordered to pay the plaintiff UGX 167,967,000 plus interest at 6.5% per annum and general damages of UGX 1,000,000. The plaintiff was ordered to pay the defendant general damages of UGX 10,000,000 plus interest. Each party to bear its own costs.

Outcome

Judgment for plaintiff on main claim with damages awarded; counterclaim partly allowed with general damages awarded to defendant

Facts

On 12 March 2019, the plaintiff and defendant entered into a subcontract for construction of six classroom blocks in Yumbe for UGX 485,000,000. The subcontract originated from a main contract between UNICEF and the defendant. Payment was to be made in four phases, with Phase 1 payment of UGX 175,434,714 due upon completion of laying the ground slab. The plaintiff's managing director was made a co-signatory to the defendant's bank account to secure payment. The contract completion date was initially 15 May 2019, extended to 6 June 2019. UNICEF terminated the main contract on 13 July 2019. At termination, the plaintiff had completed 96% of Phase 1 works (ground slab work for two blocks complete, four blocks partially complete). The defendant did not pay the plaintiff for the work done and removed the plaintiff's managing director as a co-signatory. The plaintiff claimed UGX 167,967,000 for work done. The defendant counterclaimed for breach of contract, alleging the plaintiff failed to complete works by the agreed deadline.

Issues

  1. Whether the Defendant breached the subcontract by failing to pay for work done.
  2. Whether the Defendant breached the subcontract by removing the Plaintiff's managing director as a co-signatory to its bank account.
  3. Whether the Plaintiff breached the subcontract by failing to complete works by the agreed deadline.
  4. Whether either party is liable for unjust enrichment.
  5. What remedies are available to the parties?

Orders

  • The Defendant breached the subcontract.
  • The Plaintiff breached the subcontract.
  • The Defendant is ordered to pay the Plaintiff UGX 167,967,000 as money owing for 96% of Phase 1 works done under the subcontract.
  • Interest on the sum in the preceding order is granted at 6.5% per annum from the date of judgment until payment in full.
  • General damages of UGX 1,000,000 are awarded to the Plaintiff.
  • The Defendant is awarded general damages of UGX 10,000,000 for breach of the subcontract by the Plaintiff.
  • Interest on the damages awarded to the Defendant is granted at 6.5% per annum from date when breach occurred until payment in full.
  • Each party shall bear its own costs.

Rules and key headnotes

Contract Law — Breach of Contract — Payment Obligations — Obligation to Pay for Services Rendered
Where parties enter into a contract for one party to pay for services rendered by another, payment must be made to the extent of services actually rendered, regardless of whether other contractual obligations have been breached.
Contract Law — Quantum Meruit — Payment for Partial Performance
Where a subcontractor completes 96% of a defined phase of construction work before contract termination, the subcontractor is entitled to payment for 96% of the agreed phase price, provided the work done is proved on a balance of probabilities.
Contract Law — Breach of Contract — Time of Performance — Extension of Time
Where parties agree to extend a contractual completion deadline, failure to meet the original deadline does not constitute breach of contract. Breach occurs only if the extended deadline is not met.
Contract Law — Interpretation — Entire Agreement Clauses — Scope of Contractual Obligations
Where parties agree that a contract constitutes the entirety of their agreement, the court is obligated to give effect only to the terms expressly set out in the contract. Breach of contract relates only to breach of contractually agreed terms.
Damages & Quantum — Special Damages — Pleading and Proof Requirements
Special damages must be specifically pleaded in the plaint or counterclaim and specifically proved in evidence. Claims for special damages not pleaded will not be considered by the court, even if raised in witness statements.
Damages & Quantum — Interest — Commercial Rate — Justification Required
A claim for interest at 20% or above must be justified by the party praying for it. In the absence of evidence showing that the claimant has been inordinately kept out of use of its money, a high interest rate is not warranted and the court will apply the Bank of Uganda rate.
Civil Procedure — Costs — Discretion of Court — Cases Resolved Partly in Favour of Each Party
Where a case has been resolved partly in favour of each party, the court may exercise its discretion under Section 27(2) of the Civil Procedure Act and order that each party bears its own costs.

Legislation cited (2)

Cases cited (8)

  • Ewadra Emmanuel v Spencon Services Limited (Civil Suit No. 022 of 2015)
  • Madhupaper International Ltd & Another -v- Kenya Commercial Bank Ltd & Others [2003] 2 EA 562
  • Harbutt's Plasticine Ltd -v- Wayne Tank and Pump Co Ltd [1970] 1 All ER 225
  • Juma -v- Habibu [1975] 1 EA 108 (High Court of Tanzania)
  • Interfreight Forwarders (U) Ltd -v- East Africa Development Bank
  • Gullabhai Ushillingi v Kampala Pharmaceuticals Ltd (Supreme Court Civil Appeal No. 6 of 1999)
  • Musoke v Departed Asians' Property Custodian Board & Anor (Supreme Court Civil Appeal No. 1 of 1992)
  • Kampala City Council -v- Nakaye [1972] 1 EA 446

Full judgment

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

Reenboog Construction Services Ltd v Aevar Engineering Services Ltd (Civil Suit No. 728 of 2019) [2022] UGCommC 56 (29 July 2022)
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.