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Wakhata and 4 Others v Industrial Division Local Council (Civil Suit No. 4 of 2020)

High Court · [2021] UGHCCD 167 · 2021 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 under Order 9 Rule 10 CPR following defendant's failure to file defence
Decision
Defendant ordered to pay arrears of UGX 135,467,000, general damages of UGX 25,000,000, interest, and costs

Observed later treatment

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Holding

Held that the defendant breached a memorandum of understanding for cleaning services when it failed to remit contractual payments totaling UGX 135,467,000 in arrears. The plaintiffs were entitled to recovery of the arrears, general damages for breach, and interest from the date the defendant terminated the contract without fulfilling its pledge to pay outstanding sums.

Outcome

Defendant ordered to pay arrears of UGX 135,467,000, general damages of UGX 25,000,000, interest, and costs

Facts

Five Local Council 1 Chairmen from cells in Industrial Division, Mbale Municipality entered into a memorandum of understanding dated 12 July 2011 with the defendant local council to jointly cooperate in keeping Mbale Town clean. Under the agreement, the plaintiffs recruited road gangs to sweep and clean the environment in their respective cells and were entitled to 26% (later referred to as 25%) of the defendant's monthly revenue collections to pay their workers. The defendant partly honoured its obligations until 2014, when payments became irregular or ceased. On 5 December 2017, the defendant terminated the MOU with effect from 30 July 2017 without notice and without paying outstanding arrears, though it pledged to pay. An audit commissioned by the defendant's Town Clerk dated 3 April 2018 verified arrears totaling UGX 135,467,000 owed to the five plaintiffs. The defendant was served with summons on 20 February 2020 but failed to file a defence.

Issues

  1. Whether the plaintiffs entered into a memorandum of understanding with the defendant.
  2. Whether the defendant breached the memorandum of understanding and if so, how much is in arrears.
  3. What remedies are available to the parties.

Orders

  • Judgment entered in favour of the plaintiffs against the defendant.
  • Order for recovery of UGX 135,467,000.
  • General damages of UGX 25,000,000 awarded for breach of contract.
  • Interest on the arrears at 20% per annum from 5 December 2017 until payment in full.
  • Interest on general damages at 8% per annum from date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiffs.

Rules and key headnotes

Contract Law — Breach of Contract — Failure to Perform Contractual Obligations
The breaching of an obligation which a contract imposes confers a right of action for damages on the injured party.
Contract Law — Damages for Breach — General Damages — Assessment
General damages for breach of contract are the direct consequences of the act complained of and the consequences could include loss of profit, physical inconvenience, mental distress, pain and suffering.
Contract Law — Exemplary and Punitive Damages — Requirements
Exemplary and punitive damages are awarded in cases where the wrong complained of was an oppressive, arbitrary or unconstitutional action by the servants of Government and to punish a defendant whose conduct is considered grossly negligent or intentional. A plaintiff must lead evidence to justify a claim for such damages.
Contract Law — Interest on Awards — Rate and Commencement
A plaintiff is entitled to such rate of interest that takes into account the prevailing economic value of money but at the same time one which would insulate the plaintiff against any further economic vagaries and the inflation and depreciation of the currency. Interest on general damages is awarded from the date of judgment until payment.
Civil Procedure — Default Judgment — Hearing Under Order 9 Rule 10
Where a defendant is duly served with summons but fails to file a defence within the stipulated time, the matter may be set down for hearing under Order 9 Rule 10 of the Civil Procedure Rules by way of witness statements.
Evidence — Burden of Proof — Civil Suits
In civil suits, the burden of proof is always on the plaintiff to prove the case on a balance of probabilities.

Legislation cited (5)

Cases cited (7)

  • Kasibante v Shell (U) Ltd (Civil Suit No. 542 of 2006)
  • STORMS Vs HUTCHISON (1905) A.C 515
  • Assist (U) Ltd v Italian Asphalt & Haulage and Another (Civil Suit No. 1291 of 1999)
  • Luzinda v Ssekamatte and 3 Others (Civil Suit No. 366 of 2017)
  • ROOKES Vs BANARD & ORS [1964] A.C 1129
  • Mohanlal Kakubhai v Warid Telecom (U) (Civil Suit No. 224 of 2011)
  • MUKISA BISCUITS MANUFACTURING CO LTD Vs WEST END DISRIBUTORS LTD LTD NO.2 [1970] E.A 469

Full judgment

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Wakhata and 4 Others v Industrial Division Local Council (Civil Suit No. 4 of 2020) [2021] UGHCCD 167 (26 February 2021)
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.