|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Uganda: Court of Appeal |
[Database Search] [Name Search] [Recent Decisions] [Noteup] [Help]
MUJUNI RUHEMBA
v
SKANKA JENSEN
(U) LTD
COURT OF APPEAL OF UGANDA AT KAMP ALA
CIVIL APPEAL NO.
56 OF 2000
ON APPEAL FROM HIGH COURT CIVIL SUIT No. 104 OF 1999
BEFORE:
HON. MR. JUSTICE G M OKELLO, JA
HON.
LADY JUSTICE A E M MPAGI-BAHIGEINE, JA
HON. MR. JUSTICE A TWINOMUJUNI, JA
March 6,
2002
JUDGMENT
G M OKELLO, JA: This is an appeal against the decision of the High
Court dated September 28, 1999 in Civil Suit No. 104 of 1999 whereby the
appellant's
suit was dismissed with no order as to costs.
The summary of the background facts of the case may be stated thus:
-
On March 3, 1998, the appellant and the respondent executed a contract
of sale of sand. Under the contract the appellant was to supply
to the
respondent natural sand at its construction site in Mbarara at the agreed cost
of shs.3200 per cubic meter inclusive of VAT
at the prevailing rate during the
delivery period. The respondent was to provide transport for the first calendar
month of the contract
from the initial date of delivery. Thereafter, the
appellant was to assume responsibility for the provision of a suitable vehicle
for the purpose of delivering the material and was to continue to do so
throughout the supply period. Where the appellant provided
transport, he was to
be entitled to shs.8000 per cubic meter of the material for its transportation
for the duration of the supply
period. However, where the respondent provided
his own transport for the delivery of the material, then the appellant was not
entitled
to charge for any transportation costs.
The appellant
alleged that after two days of the first calendar month of the contract the
respondent failed to provide the transport
and that by an oral agreement the
parties varied the contract whereby the appellant was to provide transport for
delivering the material
at the cost of shs. 60,000 per trip. The appellant
supplied the material using his own transport. Receipts of the goods were
acknowledged
by the respondent's agent. Payments were made on account.
A
dispute later arose between the parties on a balance of payment amounting to
shs.18,760,130. Appellant sued the respondent in High
Court Civil Suit No.
104/99 to recover that amount. By consent of the parties, the trial court
appointed an auditor to determine
the point of disagreement between them. The
auditor carried out his task and submitted his report which was received in
evidence
as Exhibit No.1. According to the report, the point of disagreement
between the parties arose out of the rate of transport charges.
The trial judge
heard the case and dismissed the appellant' claim thus giving rise to this
appeal.
The memorandum of appeal comprises the following six grounds:
-
1. “The learned trial judge erred in law and fact by relying on the auditor's report without subjecting the auditor to cross-examination.
2. The learned trial judge erred in law and fact in relying on the auditor's report based on a contract, some of whose terms were disputed by the plaintiff.
3. The learned trial judge erred in law and fact in holding that there was no variation of the Contract when no evidence was called by the respondent in contravention of the variation pleaded by the plaintiff.
4. The learned trial judge erred in law and fact in relying on the evidence of counsel for the respondent called from the bar.
5. The learned trial judge erred in law and in fact in failing to properly evaluate the evidence on the record.
6. The learned trial judge erred in law and fact in holding that both parties bear their own costs.”
Upon those grounds, the
appellant proceeded to pray this Honourable Court to allow the appeal set aside
the decision of the High Court
and to order the respondent to pay to the
appellant the balance of payment claimed general damages for breach of contract
and interest
on the decretal amount from the date of judgment till payment in
full. He also prayed for costs here and in the High Court.
At the hearing of
the appeal, Mr. Kiryowa, learned counsel for the appellant, argued grounds 1 - 5
together under the heading "the learned trial judge erred in law and fact
in failing to properly evaluate the evidence on the record."
He
complained that the learned trial judge placed too much weight on the report of
the court appointed auditor without scrutinizing
and weighing it against the
other evidence oral or documentary that was on record. He pointed out firstly
that the report covered
the period from March to August 1998 when the claim
covered the period from March to September 1998. Secondly, the report did not
make a definite finding on the amount of money owing but merely stated that it
was about eighteen (18) million shillings. Thirdly,
though the auditor's
evidence showed that payment was on account with difference which persisted and
the figure did not tally with
the claim when the trial judge made no reference
to that evidence and instead relied on the statement of counsel for the
respondent
from the bar and thereby erroneously found that the contract was not
varied. He merely stated that the report did not support the
claim when the
report itself was uncertain of the definite claim. Learned Counsel argued that
the above instances show that the trial
Judge did not scrutinise the
report.
He further complained that the learned trial judge did not
consider the issues that were framed at the beginning of the hearing of
the
case. He criticised the learned trial Judge for not acting on the evidence on
record. According to counsel, though the appellant
adduced uncontroverted
evidence which showed that the contract between the parties was varied as to the
transport cost. The learned
trial judge ignored that evidence and instead relied
on the statement of counsel for the respondent from the bar and thereby
erroneously
found that the contract was not varied.
Mr. Wambuga, learned
counsel for the respondent did not agree with Mr. Kiryowa's submissions. He
submitted that the auditor's report
was subjected to scrutiny as each party was
given opportunity to cross-examine the auditor on the report but both declined
to do
so. He denied that the auditor's report was relied on to determine the
three issues that were raised at the trial. According to him,
the purpose of the
auditor’s report was to determine the point of disagreement between the
parties. The trial judge never stated
in his judgment that he relied on the
report to decide the issues before him.
On variation of the contract
learned counsel contended that this was not pleaded" However, the
auditor’s report established
that the point of dispute between the parties
was only about the transport charges The appel1ant was charging higher than what
was
agreed on yet no material evidence was adduced to prove variation of
the contract. Though the appellant testified that the variation was written,
he failed to produce the written evidence of variation"
Instead, counsel for the
appellant sought to rely on the conduct of the respondent's agent in signing
acknowledgment on the delivery
notes as proof of variation.
Mr. Wambuga
disagreed with Mr. Kiryowa that the instant contract is a simple contract which
could be varied even by oral evidence.
He argued that by section 6 of the
Sales of Goods Act Cap 79 the variation of this contract
which is itself in writing had to be in writing as the value of the
goods" the subJect matter of the contract exceeds two hundred shillings.
He relied on Morris v Baron & Co (1918) AC 1 at 15; United
Dominion Trust (Jamaica) Ltd v Shoucair (1969) AC 340 at 348 as
authorities for that proposition. He denied that he ever gave evidence from the
bar. He submitted that what Mr. Kiryowa referred
to as evidence was his
submission regarding the note in respect of supply of fuel. The note was
tendered in evidence and his interpretation
was that- that note was not intended
to vary the contract. That was not evidence and the trial judge agreed with his
interpretation.
He finally submitted that the trial judge properly evaluated the
evidence on record and rightly came to the irresistible conclusion
that the
appellant failed to prove his claim and was therefore, not entitled to the
remedies he claimed
It is now a well established principle based on
numerous authorities that a first appellate court, like this one, has a duty to
reappraise
or re-evaluate the entire evidence on record and to make its own
finding of facts on the issues, while giving allowance for the fact
that it had
not seen the witnesses as they testified before it can decide on whether the
decision of the trial court can be supported.
The following are a few of the
many cases in which the principle was stated:
Peter v Sunday Post
(1958) EA 242;
Selle & Another v Associated Motor Boat Co Ltd
(1968) EA 123;
Banco Arabe Esponal v Bank of Uganda. Supreme Court
Civil Appeal No. 8 of 1998 (Unreported)
From the above arguments the
primary issue that crystallised. is whether the contract to supply sand between
the parties dated March
12, 1997 was varied by a subsequent agreement between
the parties. The law governing variation of contract was stated in CHESHIRE
AND
FIFOOT, LAW OF CONTRACT, 9th Edition p. 535 that
"an oral
variation leaves the written contract intact and enforceable".
That
means that a contract which by law is required to be in writing can only be
varied by a subsequent written agreement. Oral agreement
cannot vary such a
contract. The same principle was stated in Morris v Baron &
Co. (1912) AC 1.
In that case, the House of Lords was considering an
appeal involving the interpretation of a provision of their Sales of Goods Act
1893. LORD FINDAY LC stated thus:
"A contract which is required to be in writing though it cannot be varied, may be recinded by a parol contract: Goss v Lord Nugent (1833)5 B & Ad 58, 65.......Further, assuming that the new contract amounts to a mere variation of the old contract, under S. 4 of No. .. Sales of Goods Act 1893 (which follows the language of S. 4 of the Statute of Frauds) except for the purpose of being enforced by action a contract which does not comply with the requirements of the section is perfectly good.”
The learned trial judge
dealt with the issue of variation in his judgment as follows:
"Looking at the evidence regarding variation of the contract, this court is not satisfied that there was in fact such variation in view of the express stipulation in the written contract. The note on the file record relates to a single supply or authority for fueling of a truck which is consistent with schedule of the Report of the auditors indicating various fueling incidents between March and August 1998. The fuel was also paid for and was included in the total sum of shs.60,139,268 paid to the plaintiff".
It is
interesting to note that the question whether this contract is subject to
section 6 of the Sales of Goods Act Cap 79 was not canvassed before the
trial judge. There, the issue of variation "was fought on availabi1ity or
non-availability of
evidence to prove it. It is thus not surprising that the
trial Judge made no reference in his judgment to the section. It explains
why
the above passage in the trial judge's judgment considered the issue of evidence
and found that variation of the contract was
not proved.
Be that as it
may, section 6 of the Sales of Goods Act Cap 79 provides as follows: -
“6.
(1) A contract for the Sale of any goods of the value of two hundred shillings or upwards shall not be enforced by action unless the buyer shall accept part of the goods so sold and actually received the same or give something in earnest to bind the contract or in part payment or unless some note or memorandum in writing of the contract be made and signed by the party to be charged or his agent in that behalf.
(2) The provisions of this section apply to every such contract, notwithstanding that the goods may be intended to be delivered at some future time or may not at the time of such contract be actually made procured or provided or fit or ready for delivery or some act may be requisite for the making or completing thereof or rendering the same fit for delivery.
(3) There is an acceptance of goods within the meaning of this section when the buyer does any act in relation to the goods which recognises a pre-existing contract of sale whether there be an acceptance in performance of the contract or not”.
Mr. Kiryowa submitted that the above
section is not applicable to this contract because the respondent had accepted
the goods sold.
I am unable, with respect to agree with this argument because
the main contract was reduced into writing in accordance with that
section. The
acceptance of the goods by the respondent was thus on the basis of the written
contract. It is incumbent upon the appellant
to establish by written evidence
that the contract was varied.
In his examination in chief the
appellant stated thus:
"We made variation in the contract where the supplier Ruhemba provided both transport and material. The cost of transport was shs.60,000 per load of Tata Lorry."
Under cross-examination he stated thus:
-
"Skanska failed and we revised the contract. The revised agreement was written. I have here a note to the effect that fuel would be given me".
The trial judge considered the above evidence and found
that it does not establish variation of the contract I cannot fault him on
that.
The law stated above is clear. Since this was a written contract in accordance
with the requirement of the law its variation
can only be by a written agreement
evidence of such agreement was adduced. That being so, the appellant had failed
to prove the variation
of the contract. The trial judge therefore, rightly found
so.
Mr. Kiryowa’s complaint that the trial judge put too much
weight on the report of the court appointed auditor without scrutinising
and
weighing it against other evidence on record was prompted by the remark of the
trial judge in his judgment that "This claim in
this suit must fail or succeed
depending on the audit of record of transactions between the parties curried out
by the court appointed
auditor." Then he found agreeing with the report
that the respondent had fully discharged its obligations under the contract. I
reviewed the
record and found that the auditor was availed to counsel for both
parties for cross examination on his report but they declined to
do so The
effect of that decline is that they accepted the report as correct. The auditor
stated that the respondent discharged its
obligations contract. I reviewed the
record and found that the auditor was availed to counsel for both parties for
cross examination
on his report but they declined to do so. The effect of that
decline is that they accepted the report as correct. The auditor stated
that the
respondent discharged all its obligations under the contract. According to him,
the dispute between the parties arose from
excess charge on transport than what
was agreed on. On his part, the appellant claimed that this was due to the
variation of the
contract to accommodate transport charge. The rate to charge
for sand delivered was agreed on and specified in the contract per cubic
meter.
Similarly, the rate for transport, where he used his own transport was also
specified In the contract per cubic meter of the
material delivered. The report
covered the period from March to August 1998 yet the claim covered up to
September 1998. Schedule
1 of the report shows summary of payment for sand
delivered and for transport as from March to August 1998 as per the invoices.
Claim
for the period from September 1 – 8, 1998 as per invoices received
is not paid despite the report stating that the respondent
discharged all its
obligations under the contract.
The trial judge stated in his judgment
thus:
"The auditors received invoices from the plaintiff (schedule 1) record of payments to him (schedule 2) and a summary of claims schedule 2. According to the auditors, the defendant paid a total of shs.60,139,268 to the plaintiff made up of sand values (shs. 13,491,338) and transport at agreed rates of (Shs.43,485,000). The total payment included advances not invoiced for and the rest matched exactly with the invoices submitted".
As was
pointed out earlier in this judgment, the report covered the period from March
to August 1998. The invoices computed were the
invoices issued during that
period. They excluded the invoices issued for deliveries made from
September 18, 1998. No explanation was given for this omission. I think this was
an error because the appellant is entitled to
payment for the sand he delivered.
In my judgment, this complaint was well taken. Ground 6 complained against the
order of costs.
Mr. Kiryowa submitted that the trial judge erred in not ordering
for costs since normally costs should follow the event.
The trial
judge made the following order as to costs:
"I make no order for costs, however, in the interest of commercial justice that must lean in favour of local supplier engaged by a giant international company"
It is a well settled principle that an order for costs is a
matter for the discretion of the trial judge. Normally costs follows the
event.
In the instant case, the appellant had lost his suit and in the ordinary
parlance of things, the trial judge should have ordered
him to pay costs of
the suit to the respondent. The trial judge, however exercised his
discretion to make no order as to costs. I am surprised that counsel
for the
appel1ant should complain against that order which was in favour of his
client.
A court of appeal does not interfere with the exercise of
discretion of a trial judge unless it is satisfied that the judge in exercising
his discretion has misdirected himself in some matter and as a result has
arrived at a wrong decision or it is manifest from the
case as a whole that he
has been clearly wrong in the exercise of his discretion and that as a
result there has been a misjustice.
In the instant case, there is no
evidence that the trial judge misdirected himself in some matter in exercising
his discretion or
that it is manifest from the case that he was clearly wrong.
He exercised his discretion properly in my view. This ground therefore,
would
also fail.
In the result, I would allow the appeal in part. I would
direct that the trial judge with the assistance of the court appointed auditor
should determine the rightful amount due to the appellant for the sand he
delivered between September 1-8, 1998 to be paid to him.
Since the appeal
has succeeded partially, I would order that each party bears his own costs. As
Bahigeine, JA and Twinomununi, JA
both agree the appeal is allowed in part on
the above terms.
MPAGI- BAHIGEINE, J.A.: I have perused the
judgment of OKELLO, J.A, I agree that the appeal should succeed in part as
proposed by him.
TWINOMUJUNI, J.A: I have read, in draft, the judgment of My Lord Justice G.M. OKELLO, J.A, I agree with the reasoning and the conclusion therein. The appeal should be allowed in part and each party should bear own costs.
MUJUNI RUHEMBA
v
SKANSKA JENSEN INT. (U)
LTD.
HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL COURT)
HIGH
COURT CIVIL SUIT NO. 104 OF 1999
MUJUNI RUHEMBA
v
SKANSKA
JENSEN INT. (U) LTD.
(BEFORE: HON. MR. JUSTICE OKUMU
WENGI)
September 14, 1999
JUDGMENT
OKUMU WENGI, J:The plaintiff brought this suit to claim special
and general damages for breach of contract. In his claim he pleads that in March
1998 an agreement was entered into between him and the defendant for the supply
to the construction site at Mbarara of construction
sand, A written contract was
annexed to the plaint detailing the terms, He further claimed that he supplied
sand to the value of
Shs, 66,171,202/= )comprising sand and transport costs),
Out of this total the plaintiff states that he was only paid shs. 47,411,072/=
leaving a balance of Shs, 18,760,130/= outstanding for July, August and
September 1998 as particularized in delivery notes.
According to the
written agreement executed between the parties on 26/2/98 the plaintiff
undertook to supply 2500 tonnes of natural
sand. As delivery was to be measured
in cubic metres and the cost of the material was to be Ug. Shs 3,200/= per M
inclusive of VAT.
Payments were to be effected periodically on presentation of
detailed invoices, The defendant agreed to provide a vehicle for the
transportation of the sand after which the plaintiff would use his own sourced
vehicles up to the end of the contract. The supplier
(plaintiff) when so using
his own sourced transport vehicles would be entitled to claim shs. 8000 per M
for the transport cost element.
As it came to pass an interlocutory judgment was
entered in default and the case set down for formal proof as the defendant
sought
to file a WSD out of time. The WSD was filed later by consent of both
parties and interlocutory judgment set aside.
By agreement of both
counsel the dispute was referred to a firm of auditors to establish the claims
by each side. M/J J.W & Partners
were accordingly appointed to carry out an
audit to guide the parties and the court. Mr. Ochola of the audit firm then
appeared and
presented his report on oath. He stated that from his audit there
was no dispute as to the quantity of sand delivered. The dispute
he said arose
out of claims for transport which rose to about Shs. 8 million. Mr. Ochola
presented a written report and concluded
that the contract had been validly
carried out by the defendant who had paid all along on account. However the
plaintiff claimed
more than what had been agreed on for transport. The plaintiff
arrested that the higher transport charges had been invoiced and signed
for and
pleaded a variation in the terms of the contract to accommodate this,
In
the address to court by both counsel the following were agreed facts.
1. There was a contract between the parties for the supply of sand.
2. Annexture A to the plaint the contract agreement for the supply of sand was admitted by the defendant.
3. All the annexed invoices were admitted except for the transport cost element.
Consequently only two issues were set out for
settlement namely whether the disputed transport cost element as invoiced was
accepted
by the defendant and whether the defendant was liable to pay for it.
Secondly whether there had been a variation in the
terms of the contract in
particular whether transport costs were agreed upon as revised and accepted by
the parties and if so whether
the defendant was bound thereby to pay the
plaintiff.
In support of his case Mr. Mujuni Ruhemba described the
execution of the contract. In his testimony whereas the supplier had undertaken
to provide transport for the first month, it did so far only two days. As this
led to the stoppage of supplies Mr. Ruhemba testified
that he approached the
defendant with an offer to use his own transport at the rate of 60,000/= per
toad of Tata Lorry of 5-6 tonnes
per trip. He further testified that in the
varied contract it was agreed that one of the plaintiffs trucks would be fueled
by the
defendant. His total claim therefore totaled shs. 18,760,130/=. The
evidence of this witness was largely the basis of the plaintiffs
written
submissions in which the variation of the terms of the contract formed the basis
of the claim by the plaintiff. In his reply
Mr. Wambuga counsel for the
defendant contended that a scrutiny of the claim shows that the claim being
pressed includes sand deliveries
(besides transport) and are therefore
untenable. He also pointed out double invoicing and altered claims. The ,learned
counsel also
submitted that the note whereby the defendant offered to fuel
plaintiffs vehicle was just for one day which was an exception and
did not
amount to a general variation of the contract. According to the note on the
court record dated 9/3/98 an official of the
defendant had authorised issue of
80Litres of diesel for a sand delivery vehicle UZO 126. The vehicle took
26litres. Mr. Wambuga
also contended that whereas the plaintiffs vehicles were
of 6 tonnes capacity there could be no delivery above 4.8 cubic metres if
one
ton was equivalent to 1.3 cubic meters. According to him the records also showed
that there was no truck delivering 6 tonnes
as this would have been 7.8 cubic
3,metres. He asked court not to believe the plaintiff's evidence and to reject
the alleged variation
of contract as there was no oral or written agreement to
evidence it.
The claim in this suit must fail or succeed depending on
the audit of records of transactions between the parties carried out by the
court appointed auditors. The auditors received invoices from the plaintiff
(Schedule 1) record of payments to him (Schedule 2) and
a summary of claims
schedule 2. According to the auditors the defendant paid a total of shs.
60,139,268/= to the plaintiff made up
of sand values (shs. 13,491,338) and
transport at agreed rates (of shs. 43,485,000). The total payment included
advances not invoiced
for and the rest matched exactly with the invoices
submitted. According to the auditors there was a higher billing rate for
transport
which was not in the contract. This claim arose therefore from the
plaintiff charging for transport at a higher rate then that stipulated
in the
contract while the defendant carried out the terms of the contract.
Looking at the evidence regarding variation of the contract this court
is not satisfied that there was in fact such variation in view
of the express
stipulation in the written contract. The note on the file record relates to a
single supply or authority for fuelling
of a truck which is consistent with
schedule 2 of the Report of the auditors indicating various fuelling incidents
between March
and August 1998. The fuel was also paid for and was included in
the total sum of shs 60,139,268 paid to the plaintiff. This court
can therefore
find no breach of contract or a claim that the written contract was varied to
accommodate a risen transport claim.
The claim itself of shs. 18 million is not
verified separately from the total contract sum and the differential if any was
not authorized
by the contract. In consequence this claim must fail. It is
dismissed.
I make no order for costs however in the interest of
commercial justice that must lean in favour of a local supplier engaged by a
giant international construction company. It is so ordered further due to the
interventions and concessions given that interlocutory
judgment on default was
entered and set aside.
SAFLII:
|
Terms of Use
|
Feedback
URL: http://www.saflii.org/ug/cases/UGCA/2002/1.html
.RTF of original document