Wakilii

United Building Services Ltd v Yafesi Muzira T A Quickset Builders and Co. (HCT-00-CC-CS 154 of 2005)

High Court · [2006] UGCOMMC 15 · 2006 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 heard exparte following defendant's failure to file defence
Decision
Judgment entered in favour of the plaintiff with damages, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court found that an oral contract of hire existed between the parties for construction equipment at UGX 8,000,000 for two months. The defendant's failure to honour the payment cheque constituted breach of contract. The plaintiff was awarded special damages of UGX 8,000,000, general damages of UGX 4,000,000, interest at 25% per annum on special damages from the date the cheque was dishonoured, and costs.

Outcome

Judgment entered in favour of the plaintiff with damages, interest, and costs

Facts

In May 2004, the defendant requested to hire three pieces of construction equipment (a grader, roller, and water bowser) with operators from the plaintiff company for work in Jinja. The parties agreed orally on a two-month hire period for UGX 8,000,000. The equipment was delivered and used for the agreed period, then returned. The defendant issued a post-dated cheque for the agreed sum dated 6 July 2004. Prior to banking, the defendant requested a three-week grace period citing delayed payment from his employers. When the plaintiff banked the cheque on 10 August 2004, it was dishonoured and marked 'Refer to drawer'. The plaintiff's attempts to contact the defendant through phone and via the commission agent proved unsuccessful. The defendant failed to file a defence and the matter proceeded exparte.

Issues

  1. Whether or not there was a contract of hire of the construction equipment between the parties.
  2. Whether there was a breach of the said contract by the Defendant.
  3. What are the remedies?

Orders

  • Special damages in the sum of UGX 8,000,000.
  • Interest on the special damages at the rate of 25% per annum from 11th August 2004 until payment in full.
  • General damages in the sum of UGX 4,000,000.
  • Interest on the general damages at the court rate from the date of judgment until payment in full.
  • Costs of this suit.

Rules and key headnotes

Contract Law — Formation of Contract — Oral Agreements — Essential Elements
A valid enforceable contract is established by proving three elements: an offer by one party, acceptance of that offer by the other party, and the existence of consideration for the performance of the contract. The court must consider the documents tendered, the parties' oral testimony, and the parties' conduct in determining whether a valid enforceable contract existed.
Civil Procedure — Default Judgment — Effect of Failure to File Defence
Failure to file a defence raises a presumption or constructive admission of the claim made in the plaint and the plaintiff's story must be accepted as the truth.
Contract Law — Breach of Contract — Failure to Honour Payment
A breach of contract occurs when one or both parties fail to fulfil the obligations imposed by the terms of the contract. A defendant's failure to make funds available on his account to enable a payment cheque to be honoured constitutes a breach of the contractual terms relating to payment.
Damages & Quantum — Special Damages — Pleading and Proof
Special damages must be specifically pleaded and strictly proved. Where a plaintiff pleads the specific sum owed under a contract and proves that a cheque for that sum was dishonoured, the claim for special damages has been specifically pleaded and proved to the required standard.
Damages & Quantum — General Damages — Breach of Contract — Assessment
The general principle behind an award of general damages for breach of contract is to place the injured party in as good a position in money terms as he would have been had the wrong complained of not occurred. Where a business entity is denied expected income due to non-payment, it is entitled to compensation for loss of opportunity to re-invest and develop its business and for inconvenience caused by the breach.
Damages & Quantum — Interest — Award of Interest Prior to Decree
Under section 26(2) of the Civil Procedure Act, the court has discretion to award interest on a debt from the date of default until payment in full. Interest may be awarded from the date a payment cheque was dishonoured, which marks the date of default.

Legislation cited (2)

Cases cited (10)

  • Sebuliba v Co-operative Bank Ltd [1982] HCB 129
  • Miller v Ministry of Pensions [1974] 2 All ER 372
  • J.K Patel v Spear Motors Ltd (Supreme Court Civil Appeal No. 4 of 1991)
  • Francis Babuzabirwa v Faud Ali T/A Muhamed's Garage (High Court Civil Suit No. 623 of 1992)
  • Agadi Didi v James Namakajo (High Court Civil Case No. 1230 of 1998)
  • Nakawa Trading Co. Ltd v Coffee Marketing Board (High Court Civil Suit No. 137 of 1991)
  • Kyambadde v Mpigi District Administration [1983] HCB 44
  • Impresterling (U) Ltd v Karim Lugemwa [1994] KALR 163
  • Dr Serafino Adibaku T/A Family Resort Clinic v Empire Insurance Group Ltd (High Court Civil Suit No. 74 of 2000)
  • Yousuf Abdulla Galan Hussein v French Somaliland Shipping Co. Ltd [1959] EA 25

Full judgment

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

United Building Services Ltd v Yafesi Muzira T A Quickset Builders and Co. (HCT-00-CC-CS 154 of 2005) [2006] UGCommC 15 (4 May 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.