Stahlco Holdings Ltd v Mission Aviation Fellowship Europe (CIVIL APPEAL NO.2 OF 2001)

Observed later treatment

No later-treatment classification is recorded for this judgment.

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.

Holding

The Court of Appeal dismissed the appeal, upholding that the drawings and specifications formed part of the building contract and that the appellant's shoddy work and failure to complete within the agreed time entitled the respondent to terminate. Because the contract was a lump-sum contract abandoned before completion, the appellant could not recover on a quantum meruit basis. The general damages award of Shs.16,000,000 was upheld, but the interest rate of 35% was reduced to 20% on general damages and 6% on costs under section 27(2) of the Civil Procedure Act. The special damages award of Shs.21,692,257 was set aside to avoid a double benefit to the respondent.

Outcome

Appeal dismissed; special damages award set aside and interest rates reduced, general damages award upheld

Facts

In February 1994 Stahlco Holdings Ltd agreed to construct a hangar, pit latrine and generator shed for Mission Aviation Fellowship Europe on land at Kajjansi for an agreed price of US$56,070, with specifications set out in the contract and detailed drawings attached. The appellant commenced work but, before completion, the respondent unilaterally terminated the contract, alleging delay and shoddy work not in accordance with the drawings and specifications, and engaged another firm (Skanska) to complete the job. The appellant sued to recover special and general damages, denying that agreed specifications existed and contending the respondent wanted a cheap job. The respondent counter-claimed special and general damages for breach. The High Court dismissed the appellant's suit and allowed the counter-claim, awarding special damages of Shs.21,692,257 and general damages of Shs.16,000,000, with interest at 35%. The appellant had already received substantial advance payments including 50% on the hangar and full price for the generator shed and pit latrine.

Issues

1. Whether the appellant acted in breach of the building contract entitling the respondent to terminate it.
2. Whether the drawings and specifications formed part of the building contract.
3. Whether the appellant was entitled to recover on a quantum meruit basis.
4. Whether the trial judge erred in awarding general damages of Shs.16,000,000, special damages of Shs.21,692,257, and interest at 35% per annum.
5. Whether the respondent could recover both special damages and be relieved of the appellant's quantum meruit claim without receiving a double benefit.

Orders

• Main appeal dismissed with costs to the respondent.
• Interest on the general damages reduced from 35% to 20% per annum from the date of judgment till payment in full.
• Interest on costs reduced to 6% from the date of filing suit till payment in full.
• The order allowing the respondent special damages of Shs.21,692,257 set aside.
• As the counter-claim partly succeeds only as regards general damages, each party to bear its own costs on that aspect.

Rules and key headnotes

Legislation cited (1)

• Civil Procedure Act s.27(2)

Cases cited (3)

• Thorn v London Corporation (1876) 1 App Cas 120
• Sumpter v Hedges [1898] 1 QB 673
• Sietco v Noble Builders (Civil Appeal No. 31 of 1995)

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