TANGANYIKA BUS SERVICE CO. LTD v THE NATIONAL BUS SERVICE LTD (KAMATA) 1986 TLR 203 (HC)

TANGANYIKA BUS SERVICE CO. LTD v THE NATIONAL BUS SERVICE LTD (KAMATA) 1986 TLR 203 (HC)

Court High Court of Tanzania - Mwanza

Judge Mwalusanya J

3rd June, 1987.

B CIVIL CASE 21 OF 1986

Flynote

Contract - Mistake - Mistake as to tender accepted - Tender accepted on the mistaken

belief that tenderer was the highest bidder while he was not - Whether the contract

was void for mistake. C

Contract - Damages - Special damages - When awardable.

-Headnote

The defendants invited tenders for the purchase of one of its vehicles. The plaintiff's

tender was accepted and the price D was paid. When the plaintiff wanted to take

delivery of the vehicle the defendant refused delivery of the same alleging mistake in

the award of the tender to the plaintiff. The defendant argued that they wanted to

award the tender to the highest bidder who happened to be one Sanga and not the

plaintiff. The defendant sought to treat the contract as void for mistake. E

The plaintiff filed the suit for a declaration that they were the lawful owners of the

vehicle. They also asked for shs.10,000/= being special damages for expenses incurred

when they made an abortive trip to Dar es Salaam from Mwanza to collect the

vehicle.

F Held: (i) A unilateral mistake by one party to the contract will affect the validity of

the contract only if the doctrine of non est factum is successfully proved.

(ii) the damages sought are recoverable because they are direct, foreseeable

and reasonable. G

Case Information

Order accordingly.

Cases referred to:

H 1. Sheikh Brothers Ltd. v Arnold Julius Ochsner [1957] E.A. 86.

2. Saunders v Anglia Building Society [1970] 3 All E.R.961.

3. Hadley v Baxendale [1854] 9 Ex.341.

[zJDz]Judgment

Mwalusanya, J.: This is a suit over a contract of sale of a vehicle between Tanganyika

Bus Service Co. I Ltd. (the plaintiff) and National Bus Services Ltd. - Kamata (the

1986 TLR p205

MWALUSANYA J

A defendants). The defendants invited tenders for the purchase of its bus reg. no.

Su. 17719 Fleet No. 140. The plaintiff was one of those who offered to purchase the

said bus. The defendants vide its letter dated 1/7/1986 which is Exh.A in court

accepted the offer and asked the plaintiff to pay cash shs.580,280/= and collect the bus

before 24/7/1986. The plaintiff duly paid the Shs.580,280/=. However when the

plaintiff's Traffic Manager Mr. R.S. Sandhu (PW.2) went to B collect the bus on

18/7/1986 the defendants refused delivery of the same. According to the defendant's

witness Mr. Jovin A. Lyimo (DW.1) who is also the defendant's Corporation

Secretary, they refused delivery because there was a C mistake in the award of the

tender to the plaintiff. The witness testified that they wanted to award the tender to

the highest bidder but by mistake the plaintiff was awarded who was not the highest

bidder, and so it is said that the highest bidder one Yohannes s/o Sanga should have

been awarded the tender. D

As a basic statement, mistake in contract does not affect the validity of the agreement.

It is only when there is a mutual mistake, that mistake can affect the validity or

enforceability of a contract - see the decision of the Privy Council in a case from

Kenya Sheikh Brothers Ltd. v Arnold Julius Ochsner [1957] E.A. 86. The Tanganyika

Contract Act Cap.433 E in s.20(1) states:

Where both the parties to an agreement are under a mistake as to a matter of

fact essential to an agreement, the agreement is void.

F The crucial phrase is 'both parties', because, the fact that only one party is

mistaken will not affect the contract, unless one is led into his mistake by the actions

of the other party. But in here it is common ground that the plaintiffs had nothing to

do with the mistake allegedly made by the defendants. G

As for a unilateral mistake by one party to the contract, the law is that it will affect

the validity of the contract only if the doctrine of Non est Factum (it is not my deed)

is successfully proved. Non est factum is the name given to the argument raised when

the defendant in a contract suit alleges that a document which he has signed should

not be binding H upon him, because he was induced to sign it on the understanding

that it was of a completely different nature from what it is in fact. That is a very

difficult point to establish because the mistake must be one relating not to the content

but to the I character of the subject matter. The document signed should

1986 TLR p206

MWALUSANYA J

A be radically different in character from that which the plaintiff believed he was

signing. As Lord Reid pointed out in the decision of the House of Lords in Saunders v

Anglia Building Society: [1970] 3 All E.R. 961 at p.964 that

B There must I think be a radical difference between what he signed and what

he thought he was signing - or one could use the words 'fundamental' or 'serious' or

'very substantial'. But what amounts to a radical difference will depend on all the

circumstances.

C So the essence of the plea non est factum is that the person signing, believed that

the document he signed had one character or one effect whereas in fact its character

or effect was quite different. But that is far from the case in here because the

difference is very narrow indeed i.e. between two bidders who were the highest

bidders.

D In my view the mistake in here did not go to the substance of the whole

consideration or to the root of the matter. The plea of non est factum is a plea which

must necessarily be kept within narrow limits on the ground that no man should take

advantage of his own wrong. Negligence or carelessness or inadvertence on the part

of one raising non est factum E would therefore prevent the doctrine being effective

and that signing a document without reading it or appreciating its consequences is

prima facie negligence. I think the doctrine should only be available to those who are

senile, blind or illiterate or in some other way quite incapable of comprehending the

document presented to them for signature. For that F reason an order of specific

performance will issue as prayed.

The plaintiff has also asked for shs.10,000/= being special damages. He said that those

were the expenses incurred by the traffic manager (PW.2) and the driver and the

turnboy when they made an abortive trip to DSM from Mwanza to G collect the bus.

The expenses are for food and accommodation for some ten days or so. The General

Manager of the plaintiff company Mr. S.B. Hassanali (PW.1) produced a receipt

(Exh.B) being the cost of expenses that were paid out to those three employees. No

challenge was offered by the defendants to those damages. And in my view those H

damages are payable because they are direct, foreseeable and reasonable, and quite in

line with the rule in Hadley v Baxendale: (1854) 9 Ex.341. I accordingly award the

same to the plaintiffs as prayed the suit. I

Order accordingly.

1986 TLR p207

A