Court name
Commercial Court of Uganda
Judgment date
26 September 2007

Angus Waiswa Wankandya v Uganda National Chamber of Commerce & Industry (HCT-00-CC-CS-2005/309) [2007] UGCommC 77 (26 September 2007);

Cite this case
[2007] UGCommC 77

 

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGAANDA AT KAMPALA
(COMMERCIAL COURT DIVISION)

HCT-00-CC-CS-0130-2002

 

CASEMENTS (A) LTD ::::::::::::::::::::::::::::: PLAINTIFF
 

VERSUS
UGANDA DEVELOPMENT BANK ::::::::::::::::::::::: DEFENDANT

BEFORE: THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE

J U D G M E N T:

The plaintiff’s claim against the defendant is for payment of Shs.70, 068,027= for additional partition work; retention amounting to Shs.6, 296,435= and withholding tax receipt or value thereof amounting to Shs.2, 518,573=.

From the evidence, the plaintiff was invited by M/S Associated Architects, the defendant’s Project Architects, to quote for the supply and erection of Aluminium Frame Partitions at Plot 22 Hannington Road, Kampala. Pursuant to that invitation, the plaintiff forwarded a Quotation to the said Project Architect based on Elevation Drawings and Plans. Later, the Architect wrote back to the plaintiff stating that the Quotation had been approved by the defendant for a total sum of Shs.125, 928,691=. No formal contract was drawn up between the parties but the plaintiff went ahead and undertook the works based on the Quotation. It is claimed by the plaintiff that whilst at work, it realized that the actual running metres exceeded the Quoted running meters of 255.75m. That owing to the urgency of the work and with the consent of the Project Architect, it completed the works including the additions/variations and handed it to the defendant.

The plaintiff then demanded for Shs.78,883,039= being 5% retention, 4% withholding tax receipts and value of additional 153.33 running metres installed. The defendant declined payment claiming that the contract was for a lump sum as opposed to a priced bill of quantities contract; and further, that the plaintiff was bound by the contract price. Hence this suit.

At the scheduling conference held on 16/10/2002, the parties agreed:

1.       That the plaintiff was contracted to do the partitioning of UDB Towers for Shs.125, 928,691=.
2.       That the plaintiff handed over the work to the defendant.
3.       That the defendant accepted the work.

Issues were framed as follows:
1.       Whether or not the plaintiff did extra work.
2.       If so, whether the plaintiff is entitled to the payment sought.
3.       Any other remedies.

Representations:
Mr. Muwema for the plaintiff.
Dr. Byamugisha for the defendant.
 

Later in the proceedings, counsel for the defendant sought to amend the issues to include:
(i)      Whether there was an amendment to the contract by which the plaintiff was engaged to do extra work by the defendant for which the claim is made.
(ii)     Whether the principle of quantum meruit applies.
(iii)    Whether the contract was a lump sum contract and plaintiff is bound by contract price.
 
From the record of the proceedings, there is no evidence that the prayer was objected to by counsel for the plaintiff or granted by Court. It appears to me to have remained a proposal. Learned counsel for the defence has based his submissions on the issues as framed on 16/10/2002. I will do the same. I hope, in the process, to address the sub-issues raised by defence counsel’s proposed amendment as well.

As whether or not the plaintiff did extra-work, I have considered the evidence of the parties on the matter.

PW1 Mr. Abid Alam, the Managing Director of the plaintiff company stated that the original work quoted for was 255.75 running metres and that the actual work carried out was 409.08 running metres, implying an additional 153.33 running metres to the original amount that was quoted for. The evidence of PW2 Philip Fernandes, Technical Sales Manager at the time is to the same effect. I have also addressed my mind to the evidence of PW3 Peter Kamya. He was the defendant’s Project Architect. In a letter he wrote to his principal, the defendant herein, on 20/7/99, Mr. Kamya stated:

“Re: ADDITIONAL SUPPLY AND INSTALLATION OF OFFICE PARTITIONS AT UDB BY M/S CASEMENTS (A) LTD
This is to refer to our discussions regarding the installation of additional partitioning carried out by M/S Casements (A) Ltd at UDB Towers.

The total running metres as per their original quotation Ref: CAL/AA/96/951, dated 19/10/96, based on elevations only was 255.75 at total value of Shs.125,928,691= (in words) whereas the total running metres actually installed as per plans was 409.08 at total value of Shs.195,996,722 (in words) reflecting a difference of Ug. Shs.70, 068,031= (in words).

 
In view of this, it is your prerogative to settle the claim of this contractor. However we still maintain that the contractor be penalized for his negligence by deducting 10 – 15% from the amount due to him. We hope this will now put this matter to rest

Yours sincerely
Arc. P. Kamya.”

While testifying as a witness for the plaintiff, Mr. Kamya did indicate to Court that he could not say whether the plaintiffs did any additional works. That he would need documents on the matter. He attributed his indecisiveness to lapse of memory, it being long since all this happened. I must say he had a point here, given that he was testifying close to 10 years after the event. Later, after the documents had been availed to him, he conceded that going by the documents he had seen, some variations were effected.

Commenting specifically on D. Exh. 11, the letter already set out above, the Architect said:

“I was saying in short that the contractor didn’t have a contractual claim for the additional works. However, the client would exercise its prerogative and pay them for what they were claiming but penalize them for some negligence which we indicated in the letter. I confirm that additional works were done. UDB took possession of the completed work and benefited from it.”
In law a fact is said to be proved when Court is satisfied as to its truth. In the instant suit, the plaintiffs have alleged that some additional work was done. Their evidence is supported by that of PW3 Peter Kamya, the defendant’s own Architect. An Architect is generally the agent of the principal for purposes of superintending project works. I have seen no reason to doubt the sufficiently documented additional 153.33 running metres to the original contractual measurements. In these circumstances, Court is unable to accept Dr. Byamugisha’s argument that no additional works were done. On the balance of probabilities, the plaintiff did additional work as claimed. I so find and answer the first issue in the affirmative.
 

As to whether the plaintiff is entitled to the payment sought, I have also addressed my mind to the able arguments of both counsel on the matter.
I have already noted that the plaintiff was invited by M/S Associated Architects to quote for the supply and erection of the Aluminium frame partitions. The Quotations for the works were invited from a number of contractors. They quoted as follows:
(a)      Casements (A) Ltd – Shs.125, 928,691=.
(b)      Lags Construction – Shs.127, 125,705=
(c)      Jay Interiors Ltd – Shs.211, 044,600=.

After negotiations between the plaintiff and the project architect, the contract was awarded to the plaintiff at the sum of Shs.125, 928,691= inclusive of VAT.

Asked why the plaintiff was now asking for payment outside the contract price, the plaintiffs witnesses said that they made a mistake in their quotation. Asked what mistake it was, PW2 said:

The mistake that was made was, we made the quotation according to the elevation drawings submitted by the Architect. We did not compare them with the plan drawings submitted by the Architect because normally both these drawings should give us the same details for the job to be done. To elaborate further if there is a partitioning to be done there are two views. One view is taken from the top that is called plan and the other view is from front side which is called elevation view. And both these views should ideally reflect the same partition.”

 

The defendant’s Architect did not have kind words for the plaintiff’s claim. He stated in his letter of 17/12/98, D. Exh. X1:
“………………………………………………………………....

 

Your claim for additional partitioning amounting to Ug. Shs.70, 068,027= is therefore without foundation. We suspect this is a surreptitious attempt on your part to revise your quotation up-wards under the guise of additional partitioning.

 

Your statement that you based you quotations on elevations alone cannot be justified. One would wonder how a contractor of your caliber and experience could base your quotation on elevations alone when you know very well that it is the plans which define the extent of work more fully and that the elevations complement the plans and not the other way round.

 

 

If this claim were to be allowed, your quotation would no longer
be the lowest and would give you unfair advantage over your competitors.

As for …………………………………………….”

 

 

 

Asked whether he, the Architect, ever objected to the additional works, he was categorical that he could not have objected to the additional work because he had not been made aware of it before it was done. There is nothing in writing to suggest that either the Architect or the defendant was consulted before the additional works were done.

The Architect’s evidence is that by the time he was made aware that there was additional work to be paid for; it (the work) had already been done. I noted Mr. Kamya’s demeanour as he testified. He was calm and confident. In my view, his evidence that he was never consulted before the additional works were done is unassailable. I accept the defence version and reject the plaintiff’s. And herein lies the plaintiff’s fate.

 

 

 

Quotations for the works were invited from a number of contractors. The defendant opted for the cheapest bidder, the plaintiff. I would assume that the bid was based on past experience in the same field.

In a letter dated 7/11/1996, the defendant, through its agent, the Architect stated, interalia:
4. Tender figure
Your tender figure is to remain unaltered.”

 

The plaintiff accepted that condition. Its officials have now turned around to say that they mistakenly based their quotation on elevation, instead of basing it on the drawings. Who then should they blame for their carelessness? In my view, they have themselves to blame for that costly mistake.

From the records, this was a lump sum contract. It is fitting that I should refer to the relevant passages in Chitty on Contracts, Volume 2 London Sweet & Maxwell 1999 para 37 – 008. He states:

Lump sum contract. In a lump sum contract, the contractor is required to carry out and complete the entirety of the named contract works for a fixed sum agreed in advance, or, as is more usual, if there are changes in the scope of the named contract works, for “…….. such other sum as shall become payable ….….. at the times and in the manner specified in the conditions.” In the case of lump sum contracts, the proposed contract works will be of a known extent (that is, not at the development/design stage) and described in the specification or Bill of Quantities. Where the specification or Bill of Quantities forms part of the contract, provided the work is sufficiently described, the contractor will be taken to have included for that work in his fixed price. Where work is not sufficiently described, and its existence is not reasonably to be inferred from the language of the contract, the contractor will be entitled to recover payment in addition to the fixed price.”
From the above passage, it is clear to me that the plaintiff is at the wrong end of the law. The work was sufficiently described to them. They must be taken to have included the works claimed for herein in their fixed price of Shs.125, 928,691=. In my view, a contract can only be made on account of a mistake if the mistake was due to the ambiguity of the terms; or, if special circumstances exist to render the mistake excusable; or, where the defendant must have known of the plaintiff’s mistake at the execution of the contract. It would appear to me that none of the factors above is available to the plaintiff. I would consider a lumpsum contract to be one where the client essentially assigns all the risk to the contractor, who in turn can be expected to ask for a higher mark up in order to take care of unforeseen contingencies.

As PW3 Kamya correctly stated, in my view, doing additional work in construction contracts is not uncommon. However, if the actual cost of the project is under estimated, the under estimated cost will in my fair judgment ordinarily reduce the contractor’s profit by that amount. An over estimate would be to his advantage. In the instant case, the mistake relied on by the plaintiff was merely the result of its own carelessness. The plaintiff cannot avoid performance of the contract by merely pleading mistake. It also follows in my view that they cannot recover anything beyond the contract price as long as when they discovered the mistake, they did not have the courtesy of seeking the defendant’s approval of any additional work before it was done. It is settled law that where the contract is in writing, its terms can be ascertained by means of documentary evidence. Where these are clear, as herein, a Court must give effect to the terms. It is not the duty of the Court to re-write an expressly stated contract for the parties. This is not to say, of course, that a contract once written cannot be varied. It can be varied but with the concurrence of the other party.

In the instant case, the parties agreed that the tender figure would remain unaltered. The plaintiff claims that the issue of additional works was discussed with the defendant’s Architect. PW3 Kamya denies it. In view of this Court’s finding earlier on in this judgment that the Architect was never consulted before the additional works were done, the plaintiff has no valid contractual claim against the defendant for the additional work. The defendant’s refusal to exercise its prerogative to pay for work it did not sanction cannot in the circumstances be faulted. The plaintiff’s claim must therefore fail and it fails.

As to any other remedies available to the plaintiff, there is evidence that it was paid in accordance with certificates issued by the Project Architect. In D. Exh. X, the Architect told the plaintiff that the defendant did not hold any other certificate for the work they had done apart from the retention fee of Shs.2,435,920= which would be released to them after attending to all defects and uncompleted works. He also rejected the claim for taxes. In my view, he was entitled to do so. Given that close to ten years later no defects or uncompleted works have been alleged against the plaintiff, Court is of the opinion that the plaintiff is entitled to have the Shs.2,435,920= released to them. This sum is accordingly decreed to the plaintiff.

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. Taking into account the peculiarities of this case and the benefits derived by the defendant from the contract, the commercial justice of the case warrants that an order be made that each party bears its own costs. I so order.

Yorokamu Bamwine
J U D G E
25/05/2007

Order: This judgment shall be delivered by the Registrar on my behalf on the due date.

Yorokamu Bamwine
J U D G E
25/05/2007