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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF
UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-CS-0012-2003
D.S.S. MOTORS LIMITED ::::::::::::::::::::::::::::::::
PLAINTIFF
VERSUS
AFRI TOURS AND TRAVELS LIMITED :::::::::::::::
DEFENDANT
AND
AMIN TEJANI :::::::::::::::::::::::::::::::::::::::
THIRD PARTY
BEFORE: THE HONOURABLE MR. JUSTICE YOROKAMU
BAMWINE
J U D G M E N T:
The
plaintiff’s claim against the defendant is for damages for breach of
contract and negligence, and costs of the suit. From
the evidence, by a car
hire agreement between the plaintiff and the defendant, the defendant hired the
plaintiff’s vehicle
on a self-drive basis. The hire period was three
days. It was not returned within the hire period. Instead the vehicle was
involved
in an accident as it was being returned to the plaintiff.
At the
hearing, the parties agreed that:
1. There was an agreement of hire between
the defendant and the plaintiff.
2. The agreed hire value was Shs.100,000-
per day.
3. The period of hire was three (3) days.
4. The motor vehicle
was involved in an accident while under the control of a third party.
5. The
defendant carried out some repairs on the vehicle.
The following issues
are for determination:
1. Whether the defendant breached the contract of hire
of the motor vehicle.
2. Whether the car hire agreement limited the
defendant’s liability, in case of an accident.
3. Whether the
defendant is liable to the plaintiff for any loss suffered.
4. Whether the
third party is liable to indemnify the defendant wholly or in part in the event
of any liability to the plaintiff.
5. Remedies.
As stated above
already, the defence case is that there was an accident; that it was caused by
the negligence of the third party;
and that the defendant’s wish is to be
indemnified for any liability arising out of negligence.
When the matter
came up for directions under 0.1 r. 18 of the Civil Procedure Rules, the parties
agreed that the issue of liability
of the third party, and the quantum of
damages, if any, be determined at the trial of the suit. The said third party
could not appear
as a witness because of his ill-health. He was out of the
country by the time the case came up for hearing.
Counsel:
Mr.
Mugogo Edward for the plaintiff.
Mr. Siraj Ali for the defendant.
Mr.
Kiwuwa John for the Third Party.
ISSUE NO. 1: Whether the defendant
breached the contract of hire of the motor vehicle.
From the evidence, by
a car hire agreement between the plaintiff and the defendant dated 26/7/2002 the
defendant hired the plaintiff’s
motor vehicle Reg. No. UAA 465Y Toyota
Hilux on a self drive basis for a period of three days at a rate of Shs.100,000-
per day.
The effective date of hire was 26/7/2002. It was returnable on
28/7/2002. The car got involved in an accident while still in the
possession of
the defendant, in the process of being returned to the plaintiff.
It is
the defendant’s contention that its failure to return the motor vehicle at
the end of the stipulated 3 days cannot be
construed as a breach of contract
because the accident that took place ensured that the motor vehicle had to be
towed from the scene
of the accident and could not be delivered to the plaintiff
on the due date. The defendant in effect submits that the accident had
the
effect of frustrating the contract from that point on wards so that any further
performance of the contract by the defendant
became impossible.
The
learned editor of Osborn’s Concise Law Dictionary, 9th Edn at
p. 179 states:
“Under the doctrine of frustration a contract may be discharged if, after its formation events occur making its performance impossible, illegal or radically different from that which was contemplated at the time it was entered into.”
I take the view that not all supervening
events will operate to discharge a contract. And certainly in order to
frustrate a contract,
there must always be something more than mere
inconvenience.
In the instant case, it is noteworthy that the vehicle was
not completely destroyed or even damaged extensively. It was merely damaged.
It was repairable and it was indeed repaired. The defendant through its servant
Malik had it driven to Sambiya River Lodge in Murchison
Falls Park. When it was
due for return to the owner in Kampala he entrusted its management and control
to one Mr. Tejani who on
the way caused the accident. In the contract document,
some damage had been anticipated and provided for. The repairs which could
easily have been effected were marred by arguments between Mr. Malik and Mr.
Tejani as to who of them should repair it.
It is the evidence of Malik that
Tejani was negligent and that without such negligence, the accident would not
have occurred. It
is on the basis of this that he has impleaded Mr. Tejani as a
Third Party. I will shortly be determining Mr. Tejani’s alleged
liability
for the accident. However, as between Malik and Tejani, there is evidence that
Tejani was not a joy rider in the vehicle
in question. He was driving it with
the consent of Malik. He (Tejani) was a stranger to the contract between the
plaintiff and
the defendant. But between the defendant and Tejani, he was in my
view the defendant’s agent. He who does something through
another does it
himself. The defendant chose an incompetent and/or negligent agent to
accomplish its task. It is responsible for
his acts. It is the considered view
of this Court that where one party has failed to exercise reasonable care in
completing the
contract, he cannot plead frustration. In these circumstances,
the defendant’s defence of frustration must fail and it fails.
Accordingly, I hold that the defendant breached the contract of hire of the
motor vehicle.
ISSUE NO. 2: Whether the car hire agreement limited the
defendant’s liability in case of an accident.
It is the
defendant’s contention that the car hire agreement limited the
defendant’s liability in case of an accident
to the full replacement value
of the windscreen, tyres and wheel rims. The plaintiff argues otherwise. The
contract between the
parties was reduced in writing. The relevant part
reads:
“TERMS:
The Hirer is fully responsible for damage to windscreen/tyres/wheel rims to full replacement value, as these items are not insured if damaged.”
The impression I get from the reading of
this condition is that whatever else was not mentioned in the agreement was
fully insured.
There is no evidence that before the vehicle was submitted for
repairs the Insurance refused to meet the repair costs. Since the
agreement
between the parties was in writing, the parol evidence rule is applicable to it.
This rule is to the effect that evidence
cannot be admitted (or that even if
admitted, it cannot be used) to add to, vary or contradict a written instrument.
In relation
to a contract of this nature, the rule means that where a contract
has been reduced to writing, neither party can rely on evidence
on terms alleged
to have been agreed, which is extrinsic, that is, not contained in it.
I
have considered learned counsel for the plaintiff’s submission that at the
time of signing the agreement the plaintiff wholly
and fully disclosed to the
defendant that the motor vehicle was not comprehensively insured but only had a
third party insurance.
The rationale of the parol evidence rule is that parties
who have reduced a contract to writing should be bound by the writing alone.
If
the plaintiff had wanted any more terms incorporated, what was the hurry for?
They should have done that there and then. That
the vehicle was not
comprehensively insured is obvious from the Hire Agreement itself. That was the
reason for agreeing that the
hirer would be fully responsible for damage to
listed parts: windscreen, tyres and wheel rims. It is stated that these items,
in
case of damage to the vehicle, are not fully insured, implying that the rest
were. In these circumstances, Court is unable to make
this case an exception to
the parol evidence rule.
I hold that the car hire agreement limited the
defendant’s liability in case of an accident.
ISSUE NO. 3: Whether
the defendant is liable to the plaintiff for any loss suffered.
In law,
the victim of a breach of contract will have to decide which of the three
possible courses is most appropriate. He may sue
for damages, he may treat the
contract as discharged or he may seek a discretionary remedy. The plaintiff
herein has opted to sue
for damages. In the circumstances of this case, the
defendant is liable to the plaintiff for the loss suffered. It cannot of course
be for any loss suffered. It would be unjust to make a man pay for every
misfortune which could conceivably be connected in some
fanciful way with the
defendant’s act of damaging his vehicle. It must only be foreseeable
loss.
ISSUE NO. 4: Whether the Third Party is liable to indemnify the
defendant wholly or in part in the event of any liability to the
plaintiff.
This issue is between the defendant and one Tejani who caused
the accident. The defendant applied for a Third Party Notice under
0.1 r. 14 of
the Civil Procedure Rules. It is not disputed that the vehicle was involved in
an accident while under the control
of the Third Party. The defendant seeks to
make him liable because of the alleged negligent manner in which he drove the
vehicle
and an apparent promise to him after the accident that he would
contribute to the repair costs.
From the facts, the defendant authorized
Tejani to drive the vehicle from Murchison Falls Park to Kampala. He did not
take the car
by force or deceit. I have already observed that this created a
principal – agent relationship. From the pleadings, while
the
plaintiff’s case against the defendant is based on a contract, the one
between the defendant and the Third Party is based
on the tort of negligence. I
understand the law to be that in order that a Third Party be lawfully joined,
the subject matter between
the third party, and the defendant must be the same
as the subject matter between the plaintiff and the defendant and the original
cause of action must be the same. In Yafesi Walusimbi –Vs- A.G.
[1959] EA 223 the plaintiff was suing the defendant for negligence and
the defendant sought to proceed against a third party on allegations of
fraud.
He could not succeed. The Court observed that it was not sufficient that, if
the plaintiff succeeded, the defendant would
have a claim for damages against
the third party. The defendant would have to have a direct right of indemnity
as such, which right
should have, generally, if not always, arisen from a
contract express or implied.
I have not seen any element of a contract
between the defendant and Tejani in the instant case to warrant an order for
indemnity against
him. He (Tejani) was at the time of the accident acting
within the scope of his authority to drive the vehicle in question and deliver
it to the plaintiff in Kampala. This did not create any contractual
relationship between them. And even if Tejani may have promised
after the event
in sympathy to the defendant to meet part of the repair costs, I have not seen
any commercial element in such promise
to raise any inference that a legal
relationship was intended. In all these circumstances, I have seen no basis for
any third party
liability to the defendant to warrant any order of indemnity
against him. I would dismiss the claim against the third party and
I do
so.
Turning now to remedies, the plaintiff’s first prayer is for
Shs.10,500,000- being loss of income arising out of the defendant’s
failure to return the plaintiff’s vehicle. It has put it at the rate of
Shs.2,100,000- per month from the date of default
till the date of filing the
suit. It is noteworthy that for the three days of hire, the defendant had made
full payment by the time
the accident occurred. It is also noteworthy that the
plaintiff was duly informed about the accident. The defendant undertook to
repair it as per the terms of the Hire Agreement. The vehicle was taken to a
garage for repairs with the approval of the plaintiff’s
officials. The
problem that arose was of course as to who of them would meet the full cost of
its repair. From the evidence, there
was a misunderstanding as to the
interpretation of the Hire Agreement. In view of what I have said about the
parol evidence rule,
I have no doubt in my mind that the plaintiff was at the
wrong end of the law in as far as the interpretation was concerned. However,
the defendant having undertaken to perform his perceived duty under the contract
had to do so in reasonable time as well.
It is settled law that the
plaintiff who is deprived of the use of his car is entitled to damages no matter
whether he used the vehicle
in a profit making capacity and whether he has
suffered any actual pecuniary loss or not: Joseph Kyalimpa –Vs- URA
HCCS No. 5 of 1996 (un officially) reproduced in [1996] 1 KARL
155.
I consider it morally un acceptable for one person to seek
to make a fortune out of the other’s misfortune. From the circumstances
of this case, the failure to return the vehicle at the end of the stipulated
three days was not deliberate. It was because of the
accident which had
rendered the vehicle immobile. If the parties had understood each other on the
question of who would do what
according to the hire agreement, a lot of time
would have been saved. The vehicle would in my view have spent not more than
three
weeks in the garage. Because of the parties hostile conduct towards each
other, the vehicle stayed longer in the garage. Neither
party earns a credit
for that post-accident hostility. An accident by its very nature cannot be the
desire of any sane person.
I’m mindful that the measure of damages
is what the plaintiff would have earned had the negligence of the defendant
(through
the Third Party) not intervened to render the vehicle temporarily
in-operative. I’m also mindful of the role of the injured
party following
the breach of a contract: he is expected to do what he can to look after his own
interest, to mitigate the loss,
so to say.
In consideration of the above
legal principles, I have allowed a sum of Shs.2,100,000- (two million one
hundred thousand only) being
the equivalent of the hire price per day for 21
days, to represent the plaintiff’s estimated lost earnings following the
breach.
The plaintiff’s other prayer is for Shs.10,000,000- being
the cost of repair of the said vehicle. In the alternative, it prays
for
Shs.16,000,000- being the value of the vehicle before the accident.
From
the evidence of DW1 Dungu, the defendant effected some repairs on the vehicle
although according to him it was not to the plaintiff’s
desired standard.
The plaintiff asked the defendant to return the vehicle to them so that they
repair it themselves. They found
it with a leaking roof, tried to sell it as it
was but failed to get a buyer until they bought another body “at a cost
between Shs.3m – Shs.3.5m.” In the end they got a buyer who
took it for a sum of Shs.8,000,000-. This witness was unable to tell Court how
much the
plaintiff spent on repairs. But Court accepts Dungu’s evidence
that some repairs were done on the vehicle, in addition to
what the defendant
had managed to do.
In the submissions, counsel for the plaintiff has
prayed for a sum of Shs.6m under this head being difference between the
pre-accident
value of the vehicle (Shs.16m) and the actual amount realised out
of it (Shs.10m). I have not appreciated counsel’s insistence
that Shs.10m
was realised out of it given that the sale agreement talks of Shs.8m.
It
is trite that special damages must be pleaded and strictly proved. It is not
enough to just allege as has been done herein. Where
documentary evidence is
not forthcoming, or where there are documents but their authors can not come to
Court, the party should be
contented with an award of general damages. The
plaintiff’s evidence has fallen short of the standard required in cases of
this nature. Its claim for special damages under this head is therefore
disallowed. As regards general damages, these are presumed
by law to be a
necessary result of the harm alleged. The general rule regarding their measure,
whether it is an action grounded
in contract or tort, is what Courts have stated
time and again as that sum of money which will put the party who has been
injured
in the same position as he would have been in if he had not suffered the
wrong complained of. Such damages can only be an estimate,
a very rough
estimate of the present value of his prospective loss.
I have taken into
account what befell Mr. Malik. He certainly never desired it that way. I have
also considered the fact that Tejani
is not bound to contribute anything more or
at all towards the defendant’s final bill. I consider it just and
equitable that
the defendant pays a sum of Shs.2,000,000- (two million only) to
the plaintiff as general damages under this head, in addition to
the
unascertained amount the defendant spent on the shoddy repairs. I order
so.
The plaintiff has prayed for interest on the loss of income award at
the rate of 21% (I assume per annum) from the date of filing
till the date of
judgment. An award of interest is discretionary. Court has had to make an
assessment of damages before the plaintiff
could be entitled to them. In such
event interest should only be given from the date of judgment. The plaintiff is
entitled to
the rate prayed for (that is, 21% per annum) on the decretal amount
of Shs.4,100,000- from the date of judgment till payment in full.
As
regards costs, the usual result is that the loser pays the winner’s costs.
This practice is subject to the Court’s
discretion, so that a winning
party may not necessarily be awarded his costs. For example, in Dering
–Vs- Uris [1964] 2 ALL E.R. 660 the trial judge did not award the
plaintiff his costs, even though they probably ran into thousands of pounds. I
have considered
the peculiarity of the case, especially as between the defendant
and the third party. In all fairness, no order for costs should
be made against
the defendant.
As between the plaintiff and the defendant, the
defendant’s effort has in my judgment achieved considerable success. I
assess
it at 40%. I would therefore decree 60% of the costs of the suit to the
plaintiff.
It is ordered accordingly.
Yorokamu Bamwine
J U D
G E
13/06/2006
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