Wakilii

Uganda Paper Bag Manufacturers Ltd v Uganda Grain Milling Co. Ltd (Civil Suit No. 67 of 1997)

High Court · [2000] UGHC 71 · 2000 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for damages arising from fire damage to leased premises with counterclaim
Decision
Plaintiff's claim for fire damage dismissed; defendant awarded damages for stock destroyed by fire

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a tenancy agreement providing for the landlord to insure premises against fire remained binding despite the landlord's claim that rent was too low to afford insurance. A landlord's failure to insure as contractually required breached the agreement. Where the landlord breached that undertaking and fire destroyed tenant's stock, the landlord was liable to compensate the tenant. Mere difficulty of performance or unprofitability does not excuse non-performance of contractual obligations. Plaintiff's suit dismissed with costs; defendant's counterclaim allowed.

Outcome

Plaintiff's claim for fire damage dismissed; defendant awarded damages for stock destroyed by fire

Facts

The plaintiff landlord leased commercial premises at Plots 21-23 Parekh Road, Jinja Municipality to the defendant tenant under a written agreement dated 10 February 1994, running from 24 July 1993 to 23 June 1994. The rent was UGX 200,000 per month, payable six months in advance. The agreement required the landlord to insure the premises against fire and maintain the roof and structure in good repair. After the initial term expired, the defendant paid a further UGX 1,200,000 (six months' rent) and remained in occupation. On 14 January 1995, fire destroyed the building, damaging the structure and destroying the defendant's stock of raw materials for animal feed production. The defendant had previously complained about a leaking roof. The plaintiff had not insured the premises, claiming the rent was too low to cover insurance premiums. The plaintiff sued for UGX 66,000,000 for fire damage to the building. The defendant counterclaimed UGX 34,000,000 for stock destroyed.

Issues

  1. Whether the defendant was liable for damages caused to the plaintiff's premises by fire.
  2. Whether the tenancy agreement between the parties had been renewed on the same terms after expiry of the initial one-year term.
  3. Whether the plaintiff breached the undertaking to insure the premises against fire damage.
  4. Whether the defendant was entitled to recover the value of stock destroyed by fire from the plaintiff as damages under the counterclaim.

Orders

  • Plaintiff's suit dismissed with costs.
  • Judgment entered in favour of the defendant on the counterclaim for UGX 34,063,325.
  • Costs of the counterclaim awarded to the defendant.
  • Interest at 6% per annum awarded on the counterclaim from the date of judgment until payment in full.

Rules and key headnotes

Contract Law — Performance of Contracts — Excuse for Non-Performance — Economic Unprofitability
Mere difficulty of performance, increase in prices, expense, or unprofitability is not sufficient to relieve a party from carrying out contractual obligations.
Contract Law — Tenancy Agreements — Renewal by Conduct
Where a tenancy agreement expires but the tenant remains in occupation and continues to pay rent on the same terms, and the landlord accepts such payment without varying the terms, the agreement is renewed by conduct on the original terms and conditions.
Contract Law — Landlord's Covenants — Insurance — Breach of Undertaking
Where a landlord undertakes in a tenancy agreement to insure premises against fire and fails to do so, the landlord breaches that undertaking and cannot recover damages from the tenant for fire damage to the premises.
Insurance — Landlord's Obligation to Insure — Breach — Tenant's Loss
Where a landlord fails to insure premises as contractually required, thereby preventing a tenant from recovering loss of stock from an insurer, the landlord is liable to compensate the tenant for the loss incurred as a result of fire.
Damages & Quantum — Assessment of Loss — Documentary Evidence
A report prepared by a company employee from records showing items destroyed, quantity, unit price, and total value is acceptable evidence of loss, particularly where the report was prepared contemporaneously for management purposes before litigation commenced.

Cases cited (1)

  • Tusabagha Enterprises v Nyanza Textiles Ltd (HCCS No. 51 of 1988)

Full judgment

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

Uganda Paper Bag Manufacturers Ltd v Uganda Grain Milling Co. Ltd (Civil Suit No. 67 of 1997) [2000] UGHC 71 (31 March 2000)
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.