Wakilii

Robert Mujuni Namanya v George & Co Ltd & Anor (HCT-00-CC-CS 596 of 2002)

High Court · [2006] UGCOMMC 36 · 2006 Suit Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit claiming recovery of money allegedly owed from joint financing of a construction project
Decision
Suit dismissed. Plaintiff's claim for UGX 15,705,600 recovery, general damages, interest and costs refused.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the 2nd defendant, being an agent of the 1st defendant company, was not personally liable on an alleged oral agreement to share profits from a construction contract. The claim failed because no written memorandum existed as required by Contract Act s.3(1) for guarantees or special promises. The plaintiff failed to prove capital injection or an enforceable agreement. Suit dismissed with each party bearing own costs.

Outcome

Suit dismissed. Plaintiff's claim for UGX 15,705,600 recovery, general damages, interest and costs refused.

Facts

The plaintiff claimed the 1st defendant was awarded a construction contract for water tanks worth UGX 37,317,964. He alleged the 2nd defendant (Managing Director) requested him to co-finance the project with an oral agreement to share profits equally upon completion. The plaintiff claimed to have injected UGX 15,705,600 which defendants refused to repay after receiving contract payments. The defendants denied financial incapacity and capital injection, stating the plaintiff merely introduced suppliers who extended credit, which the 1st defendant paid, and that the plaintiff provided recruitment assistance. The parties were cousins and the 1st defendant completed the contract.

Issues

  1. Whether the 2nd defendant was properly sued.
  2. Whether the defendants agreed with the plaintiff to jointly finance the implementation of the project.
  3. Whether the plaintiff financed the project as alleged.
  4. Whether the plaintiff is entitled to the remedies sought.

Orders

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

Rules and key headnotes

Company Law — Agency — Personal Liability of Directors — Actions in Corporate Capacity
A director who acts in his capacity as agent of a limited liability company does not become personally liable in contract, nor does he inherit or take over the company's obligations with third parties, where the contract is made with the company itself.
Contract Law — Formation — Intention to Create Legal Relations — Family Arrangements
Not every agreement amounts to a legally enforceable contract. The element which converts an agreement into a contract is the intention of the parties to enter into legal relations and bind themselves. Family arrangements depending on good faith may not constitute binding contracts where no commercial element raises an inference that legal relations were intended.
Contract Law — Formalities — Writing Requirement — Special Promises and Guarantees
Under Contract Act s.3(1), no suit shall be brought to charge a defendant upon any special promise to answer for the debt, default or miscarriage of another person unless the agreement is evidenced by writing signed by the party to be charged. An oral agreement to share company profits lacks enforceability without such written memorandum.
Contract Law — Privity of Contract — Standing to Sue
Privity of contract is the relation which exists between immediate parties to a contract necessary to enable one person to sue another on it. A stranger to a contract cannot sue on it. The burden lies on a claimant to prove entitlement to a benefit out of a contract to which he was not an original party.
Evidence — Burden and Standard of Proof — Special Damages — Strict Proof
Special damages must be pleaded and strictly proved. Where a claimant's evidence as a whole raises doubts and contains demonstrable falsehoods, he fails to discharge the burden of proof on a balance of probabilities, and the claim for special damages must fail.
Civil Procedure — Costs — Discretion of Court — Exceptional Circumstances
While the usual rule is that the loser pays the winner's costs, the court has discretion to order that each party bear its own costs where circumstances such as blood relationship between parties and admitted services rendered warrant departure from the usual rule in the interests of justice.

Legislation cited (1)

  • Contract Act Cap. 73 s.3(1)

Cases cited (1)

  • Tesco Supermarkets Ltd v Nattrass [1972] AC 158

Full judgment

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

Robert Mujuni Namanya v George & Co Ltd & Anor (HCT-00-CC-CS 596 of 2002) [2006] UGCommC 36 (13 August 2006)
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.