Court name
Court of Appeal of Tanzania

Cooper Motors Corporation (T) Ltd vs Arusha International Conference Centre () [1991] TZCA 18 (29 October 1991);

Law report citations
1991 TLR 165 (TZCA)
Media neutral citation
[1991] TZCA 18

Mnzavas, Kisanga and Omar, JJ.A.: In this appeal the present respondent, Arusha International Conference Centre, filed a suit in the High Court, (Chua, J.), against the present appellant, Cooper Motor Corporation (T) Ltd., I seeking for an order that the appellant/

A defendant returns to him his (respondent's) motor vehicle in good condition and repair. The respondent/plaintiff also claimed from the appellant/defendant total of Shs. 166,000/=, as special damages and general damages for loss of use of his motor vehicle to the tune of Shs. 90,000/=. The trial Court was also asked to grant any further costs it B may deem fit to grant.
After a full trial the learned judge came to the conclusion that the respondent had proved his claim against the appellant and accordingly ordered the appellant to pay Shs. 1,018,969/30 as special damages, Shs. 90,000/= as C general damages and finally ordered the appellant to fix a new engine and gearbox to respondent's motor vehicle. The appellant was also to pay 9% interest on the amounts awarded from the time of filing the suit to the time the whole amount was paid in full. Aggrieved by the decision of the High Court the appellant is appealing to this Court.
D The following undisputed facts formed the basis of respondent's claim against the appellant.
On the 7th of August 1981 the respondent/plaintiff delivered the motor vehicle registration No. SU 13483, a Volkswagen Combi, to the appellant's garage in Arusha for repairs in accordance with instructions as per exhibit P2 E dated 7/8/81 for a consideration of Shs. 14,654/=. The appellant apparently repaired the motor vehicle but as the motor vehicle was about to be delivered to the respondent who was ready to pay for the repairs the appellant wrote F a letter - exhibit P1 dated 26/12/81 to the respondent informing him as follows:
We are sorry to inform you that the engine and gearbox for your car quoted above which was undergoing repairs in our workshop has been stolen.
G This was discovered in the morning of 28th September, 1981 and the matter was reported to the Police who have been dealing with it since then.
Investigations are still going on after which we shall communicate to you.
H Meanwhile we shall appreciate if you would please provide us with the engine number from the log book for onward transmission to the C.I.D.
I Yours faithfully,
For and on behalf of
The Cooper Motor Corp. (T) Ltd.

After this correspondence the appellant offered, without prejudice, to settle respondent's claim out of Court and A offered to purchase the motor vehicle at its market value at the time it was delivered for repair on 7/8/91 - exhibit P3 dated 21/1/87. A reminder regarding the offer was sent to the respondent by the appellant on 14/5/82 as shown in exhibit P4. B
A counter offer was made to the appellant by the respondent who, by way of mitigation of costs, afford to buy a new engine and gearbox for the motor vehicle whose price would be submitted to the appellants for payment by invoice; and other damages to be negotiated between the parties as per Exhibit P5 dated 24/3/83. This counter offer C was not replied to by the appellant despite two other reminders as shown in exhibits P6 and P7 dated 6/6/83 and 3/5/83 respectively. It was after this that the respondent went to Court (as mentioned above) and subsequently the appellant, being aggrieved by the judgment of the trial Court, decided to come to this Court. D
Before us the appellant was represented by Mr. Kapoor and Mr. Desouza learned Counsels. Mr. Kapoor conceded that there was a contract between the appellant and the respondent whereby the former was to repair a motor vehicle of the later for an agreed sum of money. Equally Mr. Kapoor admitted in his submission that the E motor vehicle was delivered to the garage of the appellant and thereby making the appellant a bailee of the motor vehicle. While the motor vehicle was in the possession of the bailee, the appellant, its engine and gearbox were stolen. What this Court has to decide is whether the appellant as a bailee of the motor vehicle would be responsible F in law for the loss of the engine and the gearbox.
Mr. Kapoor vigorously argued that their client, the appellant, as a bailee of the chattel exercised enough and reasonable care in protecting the property. He said to quote him - "No one would have taken the engine and gearbox without being detected by the guard. It is our contention that the motor vehicle was kept in a first class G garage and not under a tree. The appellant's duty of care was no more than what he did".
Secondly Mr. Kapoor submitted that over and above the argument that the appellant had discharged his duty of care as a bailee under section 103 of the Law of Contract Act, he was also protected from liability by the exemption H clause in the agreement between the parties. It was the learned Counsel's submission that a contract can include any exemption clause no matter how wide. In support of this argument we were referred to the decisions in Kenyon I Ltd. v Baxter Hoare & Co. [1971] 2 All E.R. 708 and Suisse Atlantique Société

A d'Armement Maritime S.A. v N.V. Rotterdamsche Kolen Centrale [1966] 2 All E.R. 61. It was submitted that the decision in these two cases was that a contract can even exclude a fundamental breach in its exemption clause. Mr. Kapoor, learned Counsel submitted that their client, the appellant, was not a warehouse; that he had B contracted to repair respondent's motor vehicle and not to warehouse it.
Coming to the quantum of damages awarded by the High Court it was submitted that the respondent had claimed a maximum of Shs. 166,000/= special damages. That being the claim Mr. Kapoor argued that the learned judge erred C in law in awarding special damages to the respondent which were more than what the respondent had pleaded. In support of this argument the Court was referred to the decision of this Court in The Cooper Motor Corporation Ltd. v Moshi/Arusha Occupational Health Services - Civil Appeal No. 1 of 1990. Finally Mr. Kapoor submitted D that even the Shs. 166,000/= special damages claimed by the respondent had not been proved. To fortify his argument we were referred to page 59 of the High Court judgment where the learned judge noted that the plaintiff, E now the respondent, had shown how he arrived at the figure of Shs. 166,000/= special damages.
The learned Counsel asked the Court to allow the appeal. In the alternative Mr. Kapoor submitted in reply that in the event the Court found that there was a fundamental breach on the part of the appellant the Court should look F into the value of a gearbox and engine. To counter Mr. Kapoor's submission that the appellant was not liable for the loss of the engine and the gearbox Mr. Umbulla, learned Counsel for the respondent/plaintiff argued that the evidence showed that the appellant instead of repairing the motor vehicle under the contract he vandalized it. This, it was argued, went counter to the statutory provisions of section 103 of the Law of Contract Act. Secondly it was G Mr. Umbulla's submission that it is now settled law that exemption clauses will no apply where there is a fundamental breach. In support of his argument we were referred to Anson's Law of Contract - 21st Ed. at pages H 126 and 127. It was argued that exemption clauses cease to have effect where the breach went to the root of the contract. It was submitted that in this case the appellant, as a bailee, was required in law to take care of the respondent's motor vehicle generally. In support of his argument the decision in Photo Production Ltd. v I Securicor Transport Ltd. [1978]3 All ER 146 was quoted.

As for quantum of damages Mr. Umbulla submitted that special damages were pleaded and that the sum of Shs. A 166,000/= claimed was up to 31/3/82. On the question of general damages it was Mr. Umbulla's submission that their claim of Shs. 90,000/= as general damages was found to be reasonable by the High Court and asked this court not to interfere. The learned counsel finally argued that this Court should order that the respondent be compensated B for the loss of the engine and gearbox. The Court was asked to dismiss the appeal with costs.
This is an interesting case and it has exercised our minds a great deal. We have endeavoured to read all the C authorities quoted to us by learned counsel and we have made our own research as to what should be the law where an exemption clause is worded in wide terms which tend to make the contract itself absurd.
This situation arose in England in the case of J. Spurling v Bradshaw [1956]1 W.L.R. 461 where it was held inter alia: D
Exemption clauses are to be read as subject to a proviso that they only avail to exempt a party when he is carrying out his contract, not when he is deviating from it or is guilty of a breach which goes to the root of it. E
If this decision is anything to go by the facts in this case show that (to borrow Mr. Umbulla's terminology) the appellant "vandalized the respondent's motor vehicle instead of repairing it". This was clearly a breach that went to the root of the contract. But, as already mentioned above, Mr. Kapoor argued that parties to a contract may insert F exemption clauses in a contract which protect a party even where there is a fundamental breach. The Suisse case (supra) quoted by Mr. Kapoor in support of his contention was also referred to by Mr. Umbulla in support of the opposite view. G
We have carefully read the judgment in this case and it is our view that the decision is more compatible with the argument advanced by Mr. Umbulla than that put forward by Mr. Kapoor.
For example at page 68 the judgment of Pearson, L.J., in U.G.S. Finance Ltd. v National Mortgage Bank of H Greece and National Bank of Greece, S.A. is quoted where he said inter alia:
As to the question of fundamental breach I think there is a rule of construction that normally an exception or exclusion clause or similar provision in a contract should be construed as not applying to a situation created by a fundamental breach I

A of contract. This is not an independent rule of law imposed by the Court on the parties willy-nilly in disregard of their contractual intention. On the contrary it is a rule of construction based on the presumed intentions of the contracting parties. It involves the implication of a term to give to the contract that business efficacy which the parties as reasonable men must B have intended it to have. This rule of construction is not new in principle but it has become prominent in recent years in consequence of tendency to have standard forms of contract containing exception clauses drawn in extravagantly wide C terms, which would produce absurd results if applied literally.
In the same case at page 76 the Court said inter alia:
D Exemption clauses differ greatly in may respects. Probably the most objectionable are found in complex standard conditions which are now so common. In the ordinary way the customer has no time to read them, and if he did read them, he would probably be told that he could take it or leave it. If he then went to another supplier, the result would be the same. Freedom to E contract must surely imply some choice or room for bargaining. At the other extreme is the case where parties are bargaining on terms of equality and a stringent exemption clause is accepted for a quid pro quo or other good reason; but this rule appears to treat all cases alike ... This is a complex problem which intimately affect millions of people and it F appears to me that its solution should be left to Parliament.
Again at page 78 the Court says inter alia:
G Sometimes it has been declared that where a fundamental breach had occurred an exception clause could not as a matter of law be relied on, but the better view on the authorities and that accepted by both sides before your lordships, is that, as a matter of construction, normally an exception or exclusive clause or similar provision in a contract should be construed as H not applying to a situation created by a fundamental breach of contract.
That was a case decided in England and so decision is of persuasive value. Coming back home we have section 103 I of the Law of Contract Act which deals with bailment. It says:

In all cases of bailment the bailee is bound to take as much care of the goods bailed to him as a person of ordinary A prudence would under similar circumstances take care of his own goods of the same bulk, quantity and value of the goods bailed: Provided nothing in this section shall be construed as applying to or qualifying the liability at common law of a B common carrier or an in keeper.
In the present case it is not disputed that the appellant was a bailee of the motor vehicle sent to him for repairs. As a bailee of the chattel the law required him to take as much care of the chattel as a person of ordinary prudence would C do in respect of his own goods. That the whole engine and its gearbox were dismantled from the motor vehicle and stolen from appellant's garage tends to support Mr. Umbulla's argument that the appellant failed to exercise duty of care in respect of the motor vehicle entrusted to him for repair. This failure went counter to the clear D statutory provisions of section 103 of the Law of Contract Act. Cap. 433.
As to the argument that the appellant was protected by the exemption clause which said inter alia that "the appellant was expressly relieved of all liability for loss of or damage to customers' goods and property however E caused" we are satisfied in our own minds that the theft of the engine and the gearbox was a breach on the part of the appellant which went to the root of the contract; and as such could not absolve the appellant from liability. We would be setting a very dangerous precedent if we are to hold that an exemption clause like the one relied upon by F the appellant could protect a garage owner in whose garage vital parts of a motor vehicle sent there for repairs are stolen. On the totality of the evidence we agree with the learned trial judge that the appellant was liable for the loss of respondent's engine and gearbox. The appeal is accordingly dismissed with costs in this Court and the High G Court.
On the question of damages it is amply clear that the respondent did not prove to the Court how he incurred the special damages of Shs. 166,000/=. The respondent did not produce even an invoice demanding payment let alone H a receipt to show that he incurred expenses in hiring alternative transport after his motor vehicle had been vandalized. That being the position and taking
into account the provisions of Order VII R.7 of the Civil Procedure Code that every plaint shall specifically state the relief which the plaintiff claims, we have no alternative but to disallow the claim of special damages. We should also I like to mention to the learned trial

A judge that it was wrong in law for him to award special damages which were more than what the respondent/plaintiff had claimed. A party is only awarded damages which he pleaded and proved by way of evidence. See C.A. Civil appeal No. 32 of 1988 - Arusha International Conference Centre v Edward Clemence.
B The claim of Shs. 90,000/= general damages for loss of use is upheld.
The motor vehicle, SU 13483, VW, COMBI to be returned to the respondent fitted with a new engine and a new gearbox and in good mechanical condition and repair.
C If the appellant has effected repairs on the motor vehicle as per repair order - Exhibit P2, repair charges as shown in exhibit P2 to be paid to him by the respondent.
D Order accordingly.