The City Council of Dar es Salaam v. Taj Mohamed, Civ. Case 64-D-67, Georges, C. J.

The City Council of Dar es Salaam v. Taj Mohamed, Civ. Case 64-D-67, Georges, C. J.

Defendant contracted to contracted to construct a market for plaintiff for Shs. 78,830/- and to complete the work within 30 weeks from 31^st July, 1965 the date of commencement. The contract provided for liquidated damages of shs. 500/- per week for late completion of the market. There was evidence that defendant delayed in constructing the building an that much of the work which he completed was defective. Exercising its contractual rights, plaintiff ejected defendant from the building site in February, 19066. The dispute was referred to the City engineer as provided in the contract and his findings, which favoured plaintiff, were served on defendant on 10th May, 1966. The contract specified that after such findings defendant could demand arbitration by giving notice within 28 days. Such notice was posted on 7^th June but was not received until 8^th June by plaintiff and was rejected because it was late. The market was completed by another contractor 48 weeks after the date specified in the contract with plaintiff. Plaintiff paid a total of Shs. 77,100/- to the two contractors, or Shs. 1,730/- less than the original contract price. However, it seeks damage of Shs. 3,417/- for payments to watchman after defendant was ejected and Shs. 24.000/- liquidated damages for the 48 week delay in completion. At the trial defendant requested that the Court order arbitration but no prayer for a stay to permit such arbitration was filed prior to the trial.

            Held: (1) Defendant was in breach of contract at the time of his ejection, and the ejection was proper. (2) The relevant date for the service of statutory notice is the date of receipt, not the date of posting, though considerations may be different where notice is posted early enough to reach the other party in the normal course of events but is delayed though no fault of the party who posted it. Thus the notice of arbitration was tardy. (3) The High court may order a stay of proceedings to permit arbitration only if application is made “at any time after appearance and before filing a written statement or taking any other steps in the proceedings.” [Quoting Arbitration Ordinance, Cap. 15, s. 6; citing New Zealand Insurance Co. Ltd. v. Andrew Spyron, (1962) E.A.74]. The procedure set forth in section 18 of the Second Schedule of the Civil Procedure Code does not apply to the High Court. [Citing Civ. Proc. Code, s. 64]. The Court doubted whether the latter procedure would permit a stay if it were applicable. (4) Section 74 of the Contract Act provides that where a contract specifies liquidated damages the aggrieved party “is entitled, whether or not actual damage or loss is proved to have been caused there by, to receive from the party who has broken the contract reasonable compensation not exceeding the

Amount so named …” Under the terms of this section, a liquidated damage clause operates only to set the maximum limit of damages and does not excuse a plaintiff from proving his actual damage. [Citing Saleh Shaher Absi v. Naider Naced Kassim, (1956) 23 E.A.C.A.382]. Thus, in effect, all damages are unliquidated. However, in cases where damage is clear but the quantum difficult to prove, the Court should give regard to the parties’ estimate where it appears reasonable, and in such cases detailed proof of specific items of damage will not have to be produced. In this case it is not clear that plaintiff has suffered any such damage. (5) The cost of employing the watchman should be allowed as damages. Damages of Shs. 1,687/-, the cost of the watchman less the difference between the contract price and the price which plaintiff paid to the two contractors, allowed.