Nec Health World Pharmaceuticals Ltd v Engineering Construction Co. Ltd (HCT-00-CC-CS 809 of 2012) [2013] UGCommC 70 (24 April 2013)

Key Facts

Transaction Type

Issues

• Whether the defendant substantially performed the contract?
• Whether the defendant breached the construction agreement?
• Whether the defendant is entitled to the prayers in the counterclaim?

Holdings

• The court determined that the defendant did not prove substantial performance of the contract, thus disallowing the prayer for full contractual price payment.
• The court found no breach of contract by the defendant, as the plaintiff's actions (locking out workers and retaining materials) prevented completion of the works.
• The counterclaimant was awarded UGX 5,000,000 in general damages and USD 10,000 in special damages, with 10% annual interest from judgment date. Costs were also awarded to the counterclaimant.

Remedies

• The costs of the legal proceedings were awarded to the counterclaimant (defendant), as the plaintiff failed to prosecute its case.
• Interest at 10% per annum was awarded on the special damages (USD 10,000) from the date of the judgment until the amount is paid in full.
• The court ordered the plaintiff to return the defendant's books of account, which had been withheld during the litigation.
• General damages of UGX 5,000,000 (Uganda Shillings Five Million only) were awarded to the counterclaimant as compensation for the plaintiff's breach of contract.
• Special damages of USD 10,000 (Ten Thousand United States Dollars) were awarded to the counterclaimant for the plaintiff's breach of contract.

Monetary Damages

Legal Principles

• The court awarded costs to the counterclaimant under general costs principles, recognizing their entitlement after the plaintiff's failure to prosecute the case.
• The court determined there was no breach of contract by the defendant, as the plaintiff's actions (locking out workers and retaining materials) frustrated performance. It relied on definitions from Black's Law Dictionary and case law to establish this finding.
• The court applied the doctrine of substantial performance, citing cases such as Dakin vs. Lee [1916] 1 KB 566 and Marshides Mehta and Co. Ltd vs. Baron Verhegen 21 EACA 153. It held that partial completion of a contract may discharge obligations if minor omissions exist, but the defendant failed to prove substantial performance in this case.
• The court emphasized the burden of proof under Sections 101 and 103 of the Evidence Act, noting that the defendant failed to prove their allegations, leading to the dismissal of their claim for full contractual payment.

Precedent Name

• SUPERIOR CONSTRUCTION AND ENGINEERING LTD VS. NOTAY ENGINEERING INDUSTRIES (LTD)
• RONALD KASIBANTE VS. SHELL UGANDA LTD
• COPCOT E.A LTD VS. GODFREY SENTONGO & ANOR
• KAMPALA CAPITAL CITY AUTHORITY VS. ZIMWE ENTERPRISES, HARDWARE & CONSTRUCTION LTD
• RUTH ALIA & 136 OTHERS VS. ATTORNEY GENERAL
• NOBLE BUILDERS VS SIETCO
• HADLEY VS BAXENDALE
• FIRE MASTERS LIMITED VS. HUAWEI TECHNOLOGIES CO. (U) LIMITED
• MASEMBE VS. SUGAR COOPERATION AND ANOR
• WALJI JETHA KANJI VS. ELAIS FREED

Key Disputed Contract Clauses

• The court analyzed the doctrine of substantial performance to determine if the defendant's completed works, despite omissions, discharged their contractual obligations. The defendant failed to prove they substantially performed the contract, leading to denial of full payment claims.
• The court evaluated the counterclaimant's damages, awarding UGX 5,000,000 in general damages and USD 10,000 in special damages. The calculation considered the contractual value and the plaintiff's role in preventing completion, while limiting interest to 10% annually.
• The court assessed if the defendant breached the contract, concluding no breach occurred as the plaintiff's actions (locking out workers and retaining materials) frustrated performance. The plaintiff's interference was deemed the primary cause of non-completion.

Cited Statute

• Evidence Act
• Contracts Act

Judge Name

Passage Text

• From the evidence given, the defendant has not proved his allegations and therefore this court is left with no option rather than disallowing the prayer for payment of the whole contractual price.
• In the result, judgment is entered for the counterclaim in the following, terms: 1. The plaintiff shall pay the counterclaim a sum of Ugx 5,000,000/= ... 2. The plaintiff shall pay the counterclaimant a sum of USD.10,000 ... 3. Interest in awarded on the special damages at 10% per annum from the date of this judgment till payment in full.
• This issue is therefore resolved in the negative. That is, there was no breach of contract on the part of the defendant.

Damages / Relief Type

• Interest on special damages at 10% per annum from judgment date until payment in full.
• Special damages of USD 10,000 awarded to the counterclaimant.
• Costs of the suit awarded to the counterclaimant.
• General damages of UGX 5,000,000 awarded to the counterclaimant.
• Order for the return of books of account by the plaintiff to the defendant.