Wakilii

Vivo Energy Uganda Limited and Another v Black and Another (HCT-05-CV-CS 37 of 2019)

High Court · [2023] UGHC 129 · 2023 Judgment for Defendants AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and tortious interference, transferred from Commercial Division to Mbarara High Court Circuit
Decision
Suit dismissed — plaintiffs failed to establish breach of contract or tortious inducement

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a novation agreement released the 1st defendant from obligations under the Retailer Supply Agreement, save for repayment of the business development fund which was discharged. No evidence established breach of the novation agreement or that the 2nd defendant induced any breach. The suit was dismissed with costs.

Outcome

Suit dismissed — plaintiffs failed to establish breach of contract or tortious inducement

Facts

The 1st plaintiff and 1st defendant entered a Retailer Supply Agreement on 14 March 2014 for a fuel station on the 1st defendant's land at Kabwohe. On 29 July 2016 the parties executed a Novation Agreement transferring the retailer obligations to the 2nd plaintiff and releasing the 1st defendant from further obligations under the original agreement, save for payment of an outstanding business development fund of UGX 139,630,000. The 1st defendant paid this sum in full on 25 June 2018 and the 1st plaintiff released the mortgage it held over his land on 27 June 2018. On 25 June 2018 the 1st defendant leased the suit land to the 2nd defendant for 15 years and handed over possession of the station. The plaintiffs sued for breach of contract and tortious interference, alleging the 1st defendant breached the agreements by evicting them before expiry and the 2nd defendant induced the breach.

Issues

  1. Whether the 1st defendant breached the Retailer Supply and Novation agreement with the plaintiffs.
  2. Whether the 2nd defendant induced the breach of the 1st defendant's agreements with the plaintiffs.
  3. What remedies are available to the parties.

Orders

  • Suit dismissed with costs.

Rules and key headnotes

Contract Law — Novation — Effect of Release from Original Obligations
Where parties to a contract execute a novation agreement substituting a new obligor for the original obligor, the original obligor is released from further obligations under the original contract save for obligations expressly preserved in the novation agreement. After novation, obligations under the original contract need not be performed unless the novation agreement provides otherwise.
Contract Law — Breach — Evidential Burden on Plaintiff
A plaintiff alleging breach of contract bears the evidential burden of proving that the defendant breached a subsisting contractual obligation. Where a novation agreement releases a party from obligations, the plaintiff must prove breach occurred either before the novation or breach of an obligation preserved by the novation agreement.
Tort Law — Inducement of Breach of Contract — Essential Elements
To establish the tort of inducing breach of contract, a plaintiff must prove five elements: existence of a legal contract; knowledge of the contract by defendant at the time of interference; intention to interfere; conduct amounting to an inducement; and conduct causing the breach. Where no subsisting contractual obligation existed at the time of the alleged inducement, the tort cannot be established.
Contract Law — Landlord-Tenant Relations — Rights Following Novation
Where a retailer supply agreement is novated and the original obligor (who is also the landlord of the site) is released from retailer obligations, any restrictions on the landlord's right to lease the property to third parties must be preserved in the novation agreement or separately contracted. Absent such preservation, the landlord may freely lease the property after discharging any financial obligations preserved in the novation.

Legislation cited (2)

Cases cited (7)

  • Printing Numerical Co v Simpson [1985] LR 19 EQ 462
  • Merkur Island Shipping Corp v Laughton (1983) 2 All ER 189
  • OBG Ltd v Allan and Others [2007] UKHL 21
  • Mpeirwe v Alsaco International Ltd & 2 Ors (HCCS 440 of 2014) [2016]
  • Lumley v Gye (1853) 2 E & B 216
  • Garret v Taylor (1620) Cro Jac 567
  • DC Thomson & Co Ltd v Deakin [1952] 2 All ER 361

Full judgment

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

Vivo Energy Uganda Limited and Another v Black and Another (HCT-05-CV-CS 37 of 2019) [2023] UGHC 129 (20 October 2023)
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.