M/S MUSILANGA ENGINEERING v P.F. NYAKUTONYA NYAMGESERA AND ANOTHER 1986 TLR 115 (HC)

 

M/S MUSILANGA ENGINEERING v P.F. NYAKUTONYA NYAMGESERA AND ANOTHER 1986 TLR 115 (HC)

Court High Court of TAnzania - Mwanza

Judge Mwalusanya J

B

16 June, 1987

CIVIL CASE 62 OF 1983

Flynote

Contract - Assignment of a debt under the doctrine of novation.

-Headnote

Musoma Foodstuff Trading Co., owned by the sons of the first defendant, were indebted to the

plaintiffs for timber C supplied to the company. The defendants by a letter undertook to pay

the plaintiff the company's debt by supplying them 720 bags of cement. Of this amount the

defendants defaulted to supply 300 bags of cement.

D Held: (i) By virtue of the letter there was created a new contract between the plaintiff and

the defendant instead of the original contract between the plaintiff and Musoma Foodstuffs

Trading Co.

(ii) the doctrine of novation recognizes that one party to a contract can release the other

and substitute a third person who then undertakes to perform the released person's obligations.

E

Case Information

Judgment for the plaintiff

Case referred to

1. Settlement Funds Trustees v Nurani [1970] E.A. 562 (C.A.) F

[zJDz]Judgment

Mwalusanya, J.: The plaintiff is claiming a sum of sh.42,000/= from the defendant being the

value of 300 bags of cement which defendant defaulted to deliver under a contract between

them. G

It is common ground that the defendants by their letter dated 1st June 1981 which is Exh. A in

Court, agreed to supply 720 bags of cement to the plaintiff without any further payment from

the said plaintiff. The plaintiff testified that the supply of cement was without payment because

he had already given some timber to the said defendant company. However the H defendant

stated that he had just undertaken to pay the debt of his sons who own the Musoma Foodstuffs

Trading Co. which owed the plaintiff for the timber he had supplied them. The defendant

denied that the timber had been supplied to him. I

Whatever the case, it is obvious that the defendant was in

1986 TLR p116

MWALUSANYA J

A breach of the contract for the debt that was assigned to him under the doctrine of novation.

This doctrine recognises that one party to a contract can release the other and substitute a third

person who then undertakes to perform the released person's obligations. Thus by agreement, a

new contract replaces the original contract. That doctrine is recognised in our country and it is

under s. 62 of the Tanzania Contract Act. Cap. 433, which reads: B

If the parties to a contract agree to substitute a new contract for it or to rescind or alter it,

the original contract need not be performed. C

That is exactly what happened here. By virtue of the letter Exh. A there was created a new

contract between the plaintiff and defendant instead of the original contract between the

plaintiff and Musoma Foodstuffs Trading Co. Therefore as to D what transpired earlier

between those two old contracting parties is irrelevant here. We are only concerned with the

new contract. The doctrine of novation was a subject matter of discussion and approval by the

East African Court of E Appeal in Settlement Funds Trustees v Nurani: [1970] E.A. 663 (C.A.)

whereof it was held to be a sound principle of law, though it was found in that case not be

applicable as no new contract had been substituted. And a distinguished legal writer Prof. R.W.

Hodgin in his book Law of Contract in East Africa (1975) E.A.L.B. at pp. 176 - 177 states that the

doctrine of novation is applicable in East Africa in the circumstances just discussed. I agree. F

Therefore even if there was originally no privity of contract between plaintiff and defendant, yet

I am satisfied that by the doctrine of novation a new contract between them was created on

1/6/1981. The defendant is bound by that contract G If those who assigned the debt to him

have defaulted on their part, then defendant can sue them. But that is not the concern of the

plaintiff.

In the event I enter judgment for the plaintiff as prayed.

Order accordingly. H

1986 TLR p117

A