Wakilii

Roko Construction Co Ltd v Attorney General (HCT00CCCS 517 of 2005)

High Court · [2008] UGCOMMC 11 · 2008 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract arising from government construction project
Decision
Judgment entered for plaintiff with damages and costs awarded

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

In a breach of contract claim arising from delayed payments under a government construction contract, the court held that interest on delayed payments was limited to the contractually agreed rate of 5% per annum during the contract period. The plaintiff's claim for compound interest at 18% per annum was rejected as unsupported by the contract. The court awarded special damages of US$143,117 at 5% interest, general damages of UGX 15,000,000, and punitive damages of UGX 2,000,000, plus interest on general and punitive damages at 25% per annum from judgment.

Outcome

Judgment entered for plaintiff with damages and costs awarded

Facts

In July 1996, the Uganda Government contracted Roko Construction Co Ltd to refurbish the Ministry of Finance Headquarters Building and reconstruct the Treasury Building for US$5,098,954.71. The plaintiff performed the contract and was paid the bulk of the contract sum except for certificates Nos 18R and 19R. The contract provided for interest at 5% per annum on unpaid sums. The defendant made late payments without paying the contractually stipulated interest despite repeated demands. The parties attempted mediation which produced a Memorandum of Understanding, but the Solicitor General rejected it on the ground that it had not been cleared by the defendant. The plaintiff sued for special damages calculated at 18% per annum interest (or alternatively at 5%), plus general and punitive damages. During the pendency of the suit, the defendant paid US$143,117 representing computed interest at 5% per annum up to the date of filing.

Issues

  1. Whether the defendant defaulted on its undertaking to pay the plaintiff as per contract.
  2. If so, what is the amount due to the plaintiff?
  3. What reliefs, if any, should be granted?

Orders

  • Judgment entered for the plaintiff against the defendant.
  • Special damages of US$143,117 (equivalent to UGX 264,766,450 at exchange rate of 1850 per dollar) already paid by defendant to plaintiff.
  • General damages of UGX 15,000,000 awarded to plaintiff.
  • Punitive damages of UGX 2,000,000 awarded to plaintiff.
  • Interest on general and punitive damages at rate of 25% per annum from date of judgment till payment in full.
  • Taxed costs of the suit awarded to the plaintiff.

Rules and key headnotes

Contract Law — Interest on Delayed Payments — Contractual Rate vs Court Discretion
Where a contract stipulates a rate of interest on delayed payments, a claim for interest at a higher rate not provided for in the contract cannot succeed as special damages but may be awarded as discretionary equitable relief where the defendant has deprived the plaintiff of money needed for business use.
Contract Law — Interest Claims — Requirement of Agreement or Statute
Interest can only be claimed if the claim is based on an agreement for it in the document sued upon or by statute.
Damages & Quantum — Interest as Equitable Relief — Basis of Award
In equity, interest is awarded whenever a wrongdoer deprives a company of money which it needs for use in its business, on the basis that the defendant has kept the plaintiff out of his money and has had the use of it himself, and mere replacement years later is inadequate compensation especially in days of inflation.
Damages & Quantum — Interest on Judgment — Date from which Awarded
Where a person is entitled to a liquidated amount and has been deprived of it through the wrongful act of another, interest should be awarded from the date of filing the suit; but where damages are to be assessed by the court, interest is only given from the date of judgment because the right to those damages does not arise until they are assessed.
Damages & Quantum — General Damages — Assessment in Breach of Contract
General damages in breach of contract are what a court may award when it cannot point out any measure by which they are to be assessed except the opinion and judgment of a reasonable man, and consist of items of normal loss arising naturally in the normal course of things which the plaintiff is not required to specify in pleadings.
Damages & Quantum — Punitive Damages — Callous Breach of Contract
Punitive damages may be awarded where a defendant was aware of its breach of contract for over five years and ignored repeated demands for payment in a callous and uncaring manner.
Civil Procedure — Mediation — Confidentiality of Failed Mediation
Whatever parties say or do in mediation should never be allowed to come back to haunt them, after the mediation effort has failed, in later proceedings regarding the same matter or a different one.

Cases cited (5)

  • E.M. Cornwell & Co Ltd v Desai (1941) 6 ULR 103
  • Wallersteiner v Moir [1975] 1 QB 373
  • Harbutt's Plasticine Ltd v Wayne Tank & Pump Co Ltd [1970] 1 QB 447
  • Sietco v Noble Builders (U) Ltd (Supreme Court Civil Appeal No. 31 of 1995)
  • Haji Asumani Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)

Full judgment

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

Roko Construction Co Ltd v Attorney General (HCT00CCCS 517 of 2005) 2008 UGCommC 11 (10 February 2008)
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.