Bank of Uganda v Kabuye (Civil Appeal 6 of 2020) [2023] UGSC 51 (6 December 2023)

THE REPUBLIC OF TIGANDA IN THE SUPREME COURT OF T]GANDA AT KAMPALA Coram: Owiny-Dollo, CJ, Mwondho, Tibotemwt-Ekirikubinzo, Tuhuise, Chihito, JJ.SC CIVIL APPEAL NO. 06 OF 2O2O BANK OF UGANDA::::::::::::::::::::::::::::::::::::::::::::::::::::::::APPELLAN-T VERSUS .I.I} KABUYE RESPONDENT (Appeal arisingfrom the judgment of the c'ourt of Appeal at Kampola in Civil Appeal No 48 of 2010 before Kasule, Kakuru & Kir1,6g1aiys, JJA dated 3l't July 20lg) .,TIDGMENT OF MWONDHA JSC 'fhis is a second appeal, by the appellant who was dissatislled with thc dccision ol-the Court ol'Appeal and appealed t. this court. The memorandum of appear had thrce grounds as l'ollows; l. The learned Justices of the court of Appeal erred in law when they failed to properly evaluatc the evidence and thereby arrived al rhc wrong concrusion that the appellant breached its contract obrigations with the respondent by deducting the respondent's housing loan without a hearing. 2. The learned Justices ofthe court ofAppeal erred in law whcn they held that it was the appellant's duty to renew or extend the respondent's reasehord title upon expiry. s 1 3. The learned Justices of the court of Appeal erred in law when they awarded the respondent generar damages in the sum of Ug. Shs. 20,000,000/= with interest of 20o/o p.a from the date of retrenchment. 1'he appellant prayed that: - (l) The appeal be allowcd, (2) Sel aside the judgment of the Court of Appcal (3) Restores the judgment of the High Court (4) Costs of this court and the courts below be provided for. Background -l hc background or-this appcal as acccprcd by thc coun or'n ppeal rras that thc rcspondenl was employed by the appellanl lionr llll l/1987 up ro 30/0.1/1995 rvhen hc rvas rerircd ar thc lcvel olPrincipar Banking ofirccr. Buirding Scction. undcr the appc ant,s in'oruntariry rctirclncnt schenre. where an emproyee wourd be compursorily rerircd by thc appelrant. -l-he appellant represenlcd to thc rcspondenl thar, pursuant to rhe resolution or- the appellant's Board. he as a pensionablc stall- retircd undcr the involunlary retirement scheme' rvas 1o receive a scverancc packagc. similar in all rcspects. to that au,arded to stalf retired under the voruntary termination schcmc, (vrS) in Dcccmber r 994. Ljnder thc vrs an employce voluntariry chose to retire or to rernain in emproyment and if the emproyee had been advanccd a housing loan, then it would not be deducred from the retirement package but would continuc to be settled under the original tcrms. 'lhe respondenr by 30/04/1995, rhe retircment date, had laken up a housing loan and another personal loan from rhe appc ant. on retircmcnt the appelant deducted uu hi. Ioun amounts frorn the retircment package, which consumed aI thc money and rert the respondcnt still indebted to the appcllant. The respondent lodged I{cCS No. 93 or'2001 againsr rhe appefiant seeking to be re-paid g$ thc sum dcducted as housing loan riom his rctiremcnt packagc and t. be awarded generar and special damagcs. The High Court dismissed thc suit with costs on 27 /0312009 so the respondent appealcd to the court o|Appear. The courr ofAppear ser aside thejudgmenr ol'the High court and entered judgrnent in favour of the Rcspondcnt. The appe"flant was dissatisfied with the decision of thc Court of Appeal hence this appeal. Representation. At the hearing of the appeal, Mr. Emmanuer Kakenga represented the respondent while Mr. Eria Mikka represented the appe[ant. Both counser fircd and adopted their written subrnissions. Appellant submissions. Learned counsel for rhe appe[ant abandoned grounds l and 2 of thc appear and concedcd to the findings of the court of Appcar upon appricarion of Crause 5 ol'Exhibir Dr. titred Early Retirement Voluntary Tcrmination of Service. counsel also conceded to the award of Ug. Shs. 20 milrion damagcs however. contcsted thc interest rate of 20%o awarded as we Il and the time when that interest would slart running. 2 Counscl subrnilted lhat the lcarncd .Iusticcs ol-thc Courl Appcal nrisdirccted thcmsclvcs on thc principle tll'la$ that intercsl on general darrragcs accrucs liont thc datc ol'asscssmenl of'thc damages as opposcd to thr: datc trr timc ol- thc \\'r(nrs doing u'hcther tortious or contraclual. IIc addcd that thc ralc on gcneral damaglcs is al a court rate and not on Comlnercial ralc as firund by thc Court of Appeal. lror lhis argun]enl counsel citcd Hope Mukankusi v. Uganda Revenue Authority, CACA No. 6 of 201I rvhich circd this Court's decision in Omunyakol Akol .Iohnson v. Attorney General, SCCA No.6 of 2012, Counsel also cited earlicr cascs ol-Prem Lata v. Pcler Musa Mbiyu, Ilg65l I E.A 592 and Sietco v. Noble Builders (U) Ltd, SCCA No. 3l of 1995. Could prayed that this court allows ground 3 in relation to the high intercst rate on general damagcs and the date when such ratc should accrue. IIc also prayed fbr costs. Respondent submissions. Counscl Ibr the respondent submittcd that awards of interest rate are discretionary. Could relied on section 26(2) of the Civil Procedure Act to thc ellect that court may ordcr an interest rate as it deems l'it. Counsel cited Sieto v. Noble Builders, supra and Premchandra Shenoi & Another v. Maximor, SCCA No. 3l of 2003 to emphasized that an award of intercst rate is discrelionary and that in this case, the leamed Justices of the Court ofAppeal exercised their discretion and warded thc same at a rate of 209,o. On thc issuc of when the interest should accrue. counse.l argued that thc leamed Justices of d the Court of Appcal \ryere awarc of the datc when the interest should accrue but. aller considering the circumstances ol-thc instant case, court saw it prudent to award the interest from the date when the respondent was retrenched. Counscl submitted that the Omunyakol case is distinguishable from the instant case because in that case the learned trial Judge had awardcd omnibus interest rate on the aggregate sum ol general, spccial and aggravated damagcs lrom the date of dismissal until payment in lull unlike in the instant casc where the intcrcst awardcd was only on gcneral darnagcs considering the lact that the respondent's retirement package was subjectcd to arbitrary dcductions by the appcllant and also taking into account the inflation trends in the economy. Counsel prayed that the appeal be dismissed with costs and uphold the judgment of the Court of Appeal. Consideration of the appeal. This is a sccond appcal and the duty ofa sccond appellatc Court was lonq settled in various cases in this Cou(. In the casc ol'Tito Buhingiro v. Uganda, SCCA No. 8 of 2014. it rvas stated, ", is trile lav' tlnl os a sccond oppellarc court, v)e are not expected to re-evaluate tlte evidenct, or questiotl the (oncurrent lindings fi.fact h.v the High ('ourt untl (-ourt o/ Appeal. llowcver, whcre it is shov,n lhul thct,did ttol evdludle or re-ewtluale lhc cvidence or v)heie lhcy are proved to be nranifist lt' u'rong on.fin(ings of/uct. lhe cout'l is obliged to do so and to ensure that.iustice is properly and timell,scrved". See also Kifamunte Henry v. Uganda, SCCA No. l0 of 1997. I shall be guidcd b1,the abovc principlcs in resolving this appeal. 1-he appellant appealcd on three grounds as stated in the metnorandurn ol'appeal, however, in his writlen submissions. Counsel abandoned grounds I and 2 and conccdcd to the lindings olthe Court ol'Appeal. Counscl also abandoned part ofground three and argued only the part in rclation to thc rate of intcrcst and when such interest would accrue. This meant that he was not appealing against the award of 20m in gencral damages to the respondent and I will therefore proceed 1o resolve the appcal only on the part ofground 3 of interest and when it was to sta(. S. 26 of the Civil Procedure Act, Cap 7l providcs as follows: "S. 26 I nterest. (l ) Where an agreement for the payment of interest is sought to be enforced, and the court is of opinion that the rate agreed to be paid is harsh and unconscionable and ought not to bc cnforccd by legal process, the court may give judgment for the payment of interest at such ratc as it may think j ust. (2) Where and insofar as a decree is for the payment of moncy, the court may, in the decree, order intercst at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution ofthe suit, with further interest at such rate rs the court deenrs reasonable on the aggregatc sum so adjudged from the datc of the decree to the date of payment or to such earlier date as the court thinks lit. (3) Where such a decree is silent rvith respect to thc payment of further interest on the aggregate sum specified in subsection (2) from the date of the decree to the date of payment or other earlicr date, the court shall be deented to have ordered interest at 6 percent per year." 'l'hc issues that arise out ofthc partial ground nunrbcr 3 arc as follou,s: - I ) Whcthcr thc Court o1'Appeal cxcrcised its discretion judicialll to arvard the 20oh intercst on thc 20m awarded as darnages s 4 2) Whcther lhc Court ol'Appcal u as .lustilicd in la\\ to ordcr the intcrcsl to run liom lhc dalc ()l' rctrcnchmcnt. When the Court ol'Appeal considered and au,arded the 20oh interest they reappraised the evidence on record as at page 43 of thc Record of- Appeal. The case of Mot v. Chanchalbhai (1915/1916) 6 E.A.L.R.l was citcd. They reproduced the rclevant I'acts as ( l) his (appellant) rctrenchment was sudden (2) He was Principal Banking Officer, a high rank in the respondent Bank. (3) His retrenchment package was reduced to nothing through the respondent's arbitrary deductions (4) He was reduced to a pauper incapable of financially supporting his family and relatives. (5) He was rendered incapable ofinvcsting into economic venture as he was deprived of use of his money. There are a number of decisions ofthis Courl and in East Altica which settled the principles to guide Courts on whether to interfere with the exercise of discrction of a trial Cou(/Court. l'tris is from the undcrstanding that awarding interest is a rnatter of discretion. See Premchandra Shenoi & Another v. Maximor Oleg Petrovich (supra) Oder, JSC held inter alia, ... "I agree that the principle applied by this Court in Sietco v. Noble Builders (U) Ltd Supreme Court Civil Appeal No. 3l of 1995 to thc eff'ect that it is a matter of the Court's discretion is applicable. 'I'he basis of awards ol interest is that the delendant has taken and used the plaintiffs money and bcnetlted. Consequently, the defendant ought to compensate the plaintiff for the money". In Uganda Development Bank v. National Insurance and Another, SCCA No. 28 of 1995, this court ciled the case o1'Mbogo v. Shah [968] E.A 93. rvhere Newbold a1 page 96. stated the principle to bc that "...a Court of Appcal should not interl-cre with the cxercise of discrction of a Judge unless it is satisfied that thc Judgc in cxercising his discrction has misdirectcd hirnsclf in some rnattcr and as a result has arrivcd at a wrong decision or unless it is manifest from the casc as a whole that the Judge has been clearly rvrong in the exercise of his discretion that as a result there has bcen a misjustice" Whilc in Shah v. AIlu ll974l l4 EACA, it was hcld inter alia that, it must be shown that there u'as unjudicial excrcise of discrction at u,hich no judge could rcasonably arrive at 81 5 Iror clarill' I w'ill reproduce lhc part ol- qround 3 s'hich is bcing contcstcd. "'l he lcarned Justiccs ol'thc Court Ol'Appcal crrcd in lau,rvhen they arvarded intcrcst of207o p.a payablc lrorn the diltc () l' rclrcnchrncnl. " \\tcrcb\ in.iusticc has hccn donc to thc part,r cortrplaittirtg I notcd that in thc instant appeal apart lionr disrnissing thc suit with costs therc was no other order rnade. So interl'ercncc of the Court ol'Appcal in thc discrction ol'thc trial Judge could no1 arisc. Ilowever. lhe principles cited are applicable to this Court as thc Court of Appcal is the firs1 appellate Court. I have already rcproduced s.26 ofthe Civil Procedure Act which governs awards ofinterest. I have read the record ofappeal in respect of the award ol the 20%o interest and this is what the Court of Appeal said; "The appellant in this appeal wos a Principal Banking Officer, a high ronk in lhe respondenl's eslablishmenl. His retrenchment was sudden and his relrenchmenl package was reduced to nothing through lhe respondent's arbitrary deductions. He was reduced to a pauper, incapable of financially supporting his family and relatives. He was rendered incapable ofinvesting into any economic venlure as he was deprived ofuse of his money. Doing the best in the circumstances, being guided by the case authority referred to above and taking into consideralion the inJlationary lrends in lhe economy Courl awards the appellant Shs. 20 million general damages. Though in the normal course of things interest on general damages runs from the date of judgment, in this case, the appellant has suffered being deprived of use of his retirement package money from the date of retrenchment, and since Courl has ordered that he is nol to be refunded any money of the housing loan, that was wrongly deducted from him. It is only fair andjust thal general damages awarded caty interest of20% p.afrom 24.04.1995 the date of retrenchment ". According to the Record ofAppeal the Courl ofAppeal declined to order the respondent to repay back the money wrongly deducted on the housing loan on the basis (a) 1'he loan payment period had long expired. (b) That the Court could not grant a relicfthat the respondent rcfunds the said loan amount to thc appellant. (c) That it was money the respondent was entitled to receive from the appellant within that period up to December 2010 by way of loan repayment. though in monthly installments. So the Court denied the appcllanl that prayer. Resolution ol'issuc ( I ) rvhether thc Court cxerciscd its discretion .judiciously to au'ard 20oZ intercst on thc sum of'20 million as damagcs. I lind suh rule (2) ol'section 26 of thc Civil s5 6 Proccclurc Act applicahlc lo lhc ahovc rcasoning ol'lhc C()url ol'Appcal. Iror clarill'. I shall reproducc it. "u'hcrc and in so lar as a clccrcc is lirr payncnt ol'ntone\'. tlrc Court nrat in a d'ecrcc or order ol'intcrcst al such ratc as thc Cottrt dccms reasonablc to bc paid <tn thc principal sum ad.iudged liom thc datc ol'thc suit to lull pa)'nrent." The Courl ol'Appcal did not ad.iudgc lurthcr intercst in addition. On lurlher pcrusal olthe Record ol'Appeal. the appellant stated that hc lost his l2-vear-old son in 1996 Ibr hc had no mone)' to pay lbr his son's medication. llis sistcr he rvas supporling in school had to drop ou1 ol'school. IJc said he would have investcd the relrcnchmcnt packagc moncy into poultry and piggerl . In almost a similar case Bank of Uganda v. Masaba & 5 Others, SCCA No. 03 of 1998, the Cou( ol'Appeal cited it. The lacts and partics were all liom lhc Banking sector. Briefly the facts werc that the Respondents were employees ofthe appellant (Bank ofUganda) and the appellant's (iovernor \\,rote to its employecs offering them voluntary retircment scheme. Among the conditions in the scheme was a clause that exempted deductions on housing loans. The respondents individually applied to the appcllanl (Bank ol'Uganda) to retire on the basis of the terms and conditions specilicd in the Govcmor's letter (retircment scheme). Payments of their rcspcctivc retirement packagcs were made to thc respondent however. the appellant had made dcductions ol'housing loan liom their retirement packages. Due to the deductions, thc respondents wcre lell with little or no money to start relirement lile. Thc respondcnts succcssfully sued the appellant in the High Courr. The appellant (Bank of Uganda) unsucccssfully appealcd to the Court ol'Appeal hence the appeal to the Supreme Court and whilc disrnissing the appeal, Oder, JSC, cited Flint v Lowell 1935 I kb 354 where Creer, CJ said, "ln order to justifi reversing the trial judge on lhe question of amount of domages it will generalll, be necessary that lhis courl (appellate court) should be convinced eilher that the judge octed upon some wrong principle of law, or the antounl owarded v,as so exlremeb) high or so very small as to make it, in the judgement of this courl, an enlirely en'oneous eslimate of the damage to which the plaintif.f is entitled. " Iloth the Court ofAppeal and the Suprcnre Court lcft undisturbed the award. The Court of Appeal considered the lacts as already statcd in this judgment. I havc also perused the Courl Record though thcre is a presumption in fhvour o1' judicial discretion being rightly exercised. I was satisfied that the facts as stated above liorn thc Record of Appcal, the 67o intercst rvhich is a dcfauh ratc cannot satisly the cnds ofjustice. Every case has to be dctermincd according to its own facts and circumstances. l-hc learned Justices I 1 On the issue whether the learned Justices were.justified to order the interest to run liom the time ol retrenchment instcad of date of iudgment I have reproduced already in this judgmcnt the reasons why they said so and rvhat stated cannot be separated lrorr the reasoning of when it should run. l-hc Justiccs of the Court of Appcal considered and took into account the vartous circurnstances of the case to justily the departure fiom the principle. 5.26 (2) lays the ground lor the interest ratc and I have already rcproduced it. As to when the interest would start I would rather go by that, that the interest u,ould rum from the date of suit to full payment. The guidance in that subsection is clear. I too take into account the circumstances of the case as stated above, that the interest ol' justice would demand that. This would be fair to both partics in my view. Also I have considered the fact that the Court of Appeal did not adjudge an additional interest. The 20%o interest per annum from the date of commencement of the suit till full payment would suffice. In the result the appcal partially succeeds and I would rnake the lbllowing orders: - (1) Uphold the Court of Appeal decision on interest of 200% per annurn. (2) The interest to accrue from thc commencelnent of the suit till payment in full Dated at Kampala this ... b day of ....2023 Faith Mwondha Justice of the Supreme Courl L 8 considered the circumstanccs and taking inlo account all rvhat the appcllant did to the respondent. I find that, thcy cxcrciscd their discrction judicialll . I am unable to fault the lcamcd.lustices ol'the ('ourt o1-Appeal and I uould not intcrl'ere. THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPAIA CORAM: OWINY - DOLLO CJ; MWONDIIA, TIBATEMWA-EKIRIKUBINZA, CI]IBII'A JJSC CIVIL APPEAL NO. 06 OF 2O2O 'I tIIIAISL ANI) 2023 APPELLANT VERSUS J.B KABUYE RESPONDENT (Arising from the decision of the Court of Appeal in Civil Appeal No. 48 of 2010 before Kasule, Kakuru and Kiryabwire, JJA dated 31" July 2018) JUDGMENT OF OWINY - DOLLO; CJ I have had the benefit of reading, in draft, the judgment of my Iearned sister Mwondha, JSC. I concur with the reasoning, conclusions, and orders proposed therein. Since Tibatemwa-Ekirikubinza, Tuhaise, Chibita, JJSC, also agree, orders are hereby issued in the terms proposed by Mwondha JSC in her judgment. Dated, and signed at Kampala this ..e3. day of r\ Alfonse C. Owiny - Dollo Chief Justice BANK OF UGANDA. THE REPUBLIC OF UGAN'DA IN THE SUPREME COT.IRT OF UFANDA AT KAMPALA -/ ICORAM: OWII{Y -DOLLO CI; MWONDHA, TIBATEMIYA-EKIRIKUBINZA, TUHAISE; CHIBITA; JJ.SC) CIVIL APPEAL NO. 06 OF 2O2O BETWEEN BANK OF UGANDA APPELLANT AND J.B. KABUYE RESPONDENT lAppeal arisingfrom the judgntent and decision of the Court ol Appeal at Kampata before Hon. Justices: (Kasule, Kakuru and Kiryabwire, JJAJ in Civil Appeal No. 18of 2010dated3ls luly2018. JUDGMENT OF PROF. TIBATEMWA-EKIRIKUBINZA. JSC. I have had the benefit of reading the judgment of my learned sister, Hon. Justice Mwondha, JSC. I agree with her analysis and conclusion. I also agree with the order that costs in this Court and in the courts below be awarded to the Respondent. ,A Dated at Kampala this (q day of... 2023. L^' -,t^o-^-\cr'tn"^-<-' JUSTICE PROF. LILLIAN TIBATEMWA-EKIRIKI]BINZA JUSTICE OF TEE SUPREME COURT. THE REPUBLIC OF UCANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA (CORAM: OWINY-DOLLO, CJ; MWONDHA; TIBATEMWA- EKIRIKUBINZA; TUHAISE; CHIBITA; IISC) CIVIL APPEAL NO. 06 OF 2O2O BANK OF UGANDA APPELLANT VERSUS I.B KABLTYE ...... ...............RESPONDENT [Appenl ansing from the judgment of the Court of Appenl at Kampala before Kasule, Kakuru, Kiryabtoire, llA, in Cioil Appeal No. 48 of 2010, dltted 31st luly, 20181 I UDGMENT OF TUHAISE, ISC. I have had the benefit of reading in draft the Judgment Prepared by *y learned sister Hon. Justice Faith Mwondha, JSC. I agree with her decision, and the orders therein. 4^ Date at Kampala, this day of... 2023. Percy Night Tuhaise IUSTICE OF THE SUPREME COURT THE REPUBLIC OF UGANDA IN TEE SUPREME COURT OT UGAND.E T,T I{T,MPT,IJA (CORAM: OWINY-DOLLO, C. J; MWONDHA; TIBATEMWA; TUHAISE; CHIBITA; JJ.SC) CIVIL APPEAL NO: 06 OF 2O2O BANK OF UGANDA APPELIANT VERSUS J.B. KABUYE RESPONDENT [An appeal arlslng {ron the judgznent ot lhe Coutl ot Appeal at lCanpala in Ctvil Appeal No. 18 of 2010 before Kasule, I(akuru & Kbyabvvlre lJA, dated ?ld IuIf 20181 IUDGMENT OF CHIBITA. ISC I have had the benefit ofreading in draft the judgment prepared by my learned sister, Hon. |ustice Mwondha, fSC and I agree with her reasoning and her conclusion. I also agree with the orders that she has proposed. 2023 ( fustice Mike Chibita JUSTICE OF THE SUPREME COURT Dated at Kampala this ...,,...*......day of ....,.D**.*#g+