RUGANGO v. BPR

# RUGANGO v. BPR

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2014-01-17 - Case/document no.: RCOMA 0147/11/CS - Collection: Supreme Court

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RUGANGO v. BPR [Rwanda SUPREME COURT– 2014SC– RCOMA 0147/11/CS (Mutashya, P.J., Mukanyundo and Kayitesi R, J.) of January ,17th 2014] Commercial laws – Loan contract – The fact that the bank returned back the money that it had given in loan to the client is the reason of contract violation – Party cannot say that the above act caused him a business loss but a loss of opportunity. The law of July 30,1888 instituting the book of civil law related to contracts and contractual obligations, art.478 and 480. Facts: The appellant signed a loan contract with the plaintiff of rwf 5.000.000 where he was supposed to pay rwf 208.000 each month within 2 years, in the framework of buying a Toyota Hiace Minibus for human transport project. The appellant operated a withdrwal of rwf 1.300.000, and then the plaintiff (Bank) refused him to operate the remaining part of the loan which caused the failure of his project. The bank submitted the case asking the court to orderer the client to pay whole amount of the loan given and interests. The client also on his side asked the court to order the bank to pay him civil damages for all illegal acts done saying that the plaintiff violated the contract. The case was heard and judge said that every part in this case has reason on one part of his side. The plaintiff appealed in Commercial High court which concluded that the case was heard by incompetent court and the appellant also desisted to the case before the substantial hearing. Held: 1. Giving or not giving the loan is a right for the bank. But in case of when the bank promised a loan to the client the bank has to be accountable, since the act itself can have concequance. As the doctrines says even if the bank had not yet given the loan but only promises has to be honoured. The fact that the bank decided to return back the loan that was given has to be accountable for that act since this is contrary to their agreements. 2. The court cannot confirm the loss that could be generated by the above said act of reurning back the loan into the hand of the bank but which is objective is that there has been a loss of opportunity to engage in a transport project. Following the doctrines and jurisprudences it said that judge has to use his self appreciations to determine civil damages to be paid. The court confirms that civil damages to given to the appellant successors’ equal to rwf 1.300.000.

The heir appeal has merit on some points. Damages for heirs should be paid by the defendant. The court fees should be paid by the defendant. Statutes and statutary instruments. law of July 30,1888 instituting the book of civil law related to contracts and contractual obligations, art.478 and 480. No Cases referred to

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Judgment I. THE BRIEF BACKGROUND OF THE CASE [1] On 26/11/2004, people’s Bank of Rwanda, Nyamata branch, signed a loan contract with RUGANGO Dismas, of rwf5.000.000 for a project of buying a Toyota Hiace Minibus taxi to operate transport business in the road Nyamata-Kigali, with a monthly payment of rwf 208.000 in 24 shares including 18% of interest. From 30/12/2004 up to 30/12/2006; on 30/11/2004 and on 23/12/2004 Rugango said that he operated a withdrawal of rwf1, 300, 000 then the bank refused to give through the above said account, without notifying any reason of that. He insisted asking the bank for explanations but the bank refused to communicate. He then decided to return back the taxi to the owner and the project failed like that. [2] On 05/02/2005 the people’s bank of Rwanda Ltd, deducted to his account an amount equal to rwf294.650, after 9 days (on 16/2/2005), operated another deduction of rwf2.410.500, the total amount remained to the account was only rwf200; then BPR listed and published Mr. Rugango Dismas among entrusted clients. [3] Since the time, people’s bank of Rwanda Ltd submitted his indictment asking the nyarugenge commercial court to order Rugango Dismas to pay rwf2.214.000 as remained part of the loan that BPR gave to him, including interests of rwf842.427 and delay interests of rwf187.206 and court fees equal to 15% of the total amount which is rwf486.544. In that case RUGANGO Dismas submitted his request explaining the problem and requested on his side civil damages equal to rwf25.000.000, saying that the bank didn’t honor the contract. [4] The court decision on this case nº RCOM 1970/08/TC/NYGE on 13/02/2009 and decided that every party in the case has right on certain part and ordered that BPR has to pay to RUGANGO Dismas civil damage equal to rwf8.700.000. [5] the people’s Bank of Rwanda Ltd appealed against this case into the high commercial court, and court decision nº RCOMA 0046/09/HCC was rendered ordering the removal of the appealed case because the nyarugenge commercial court was not competent to hear this case, its value equal to rwf25.000.000 which is beyond his competence, but when the substantial hearing was going to be held the BPR decided to desist to the case. [6] Meanwhile RUGANGO Dismas submitted the request into the high commercial asking civil damages for to the bank for non-executed loan contract, the court on 28/10/2011, decided that the request of RUGANGO Dismas has no legal bases and has to pay to the Bank rwf500.000 for court and lawyer fees.

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[7] On his side RUGANGO Dismas appealed the above court decision into the Supreme Court on 28/11/2011saying that court ignored all evidences given that the bank refused him to withdraw money to his account. [8] The substantial hearing on this case could be held on 11/06/2013 but the case was adjourned because the court decided to invite to the case all successors of RUGANGO Dismas, and finaly the case was heard on 10/09/2013, and successors of RUGANGO Dismas were assisted by Me KARAMBIZI Canisius and BPR assisted by Me KANYAMBO Diogène who started by raising up incidents that the appeal was done with delay, on 04/10/2013 the court found no reason for those incidents, the hearing started on 03/12/2013, and meanwhile the copy of contract signed was also given to the court. [9] The case was heard on 10/09/2013, and successors of RUGANGO Dismas were assisted by Me KARAMBIZI Canisius and BPR assisted by Me KANYAMBO Diogène II. LEGAL ISSUE OF THE CASE AND THEIR ANALYSIS 1. To know if the People’s Bank of Rwanda Ltd did not honour the loan contract signed with RUGANGO Dismas. [10] Me KARAMBIZI Canisius assisting RUGANGO Dismas said that BPR Ltd violated loan contract signed on 25/11/2004, because he was supposed to pay rwf208.000 each month in 24 months from 30/12/2004 until 30/12/2006, including interest of 18% and delay interest of 4%. He says that on 30/11/2004 and 23/12/2004 RUGANGO Dismas operated a withdrawal of rwf1, 300, 000 then Bank refused him to get money from his account and without any reason notified, however the bank operated illegal deduction of his money to the account, his project of Taxi Minibus (Hiace) failed. [11] As he said all necessary evidences were provided about the issue of deduction of RWF294.650 on his account on 05/02/2005 that operated by the BPR Ltd, and after 9 days (on 16/2/2005), another deduction of rwf2.410.500 was operated; and the fact that the bank published RUGANGO Dismas among entrusted clients. [12] He says that he was supposed to start paying on 30/12/2004 until 30/12/2006, and he had started so. [13] Me KANYAMBO Diogène assisting the bank says that the judge in the primary hearing shows that there is no evidences to prove that the bank refused him to take on his own account. He continue saying that if he was not satisfied with being a client of this bank he could proceed by moving to another bank and ask the bank to cancel the contract but he didn’t communicate anything to his bank. [14] He admitted that bank did an error when operated a deduction but if his client RUGANGO Dismas could complain about it and the issue could be settled out instead of going to court. He explained that what is violated is not a loan contract but a deposition contract on 10/09/2013 which could be a subject of this case.

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THE VIEW OF THE COURTS [15] The article 33 of civil code of law book III stipulate that “Contract has effect to the both signed parties”, which means that all contracts done following article of law are considered as law among signed parties, and any cancellation is possible upon agreement of parties or from any legal reason. [16] it is evident in all papers presented by Me KARAMBIZI Canisius during hearing although are photocopies, that on 05/02/2005, Bank operated a deduction to the RUGANGO Dismas’s account an amount of rwf294, 650, and 16/02/2005 deducted rwf2.410.500 which was not denied by the lawyer of BPR. [17] The court found that the contract signed BPR Ltd was related to the project of doing transport where RUBANGO Dismas was supposed to pay rwf208.000 each month and ordinary interest of 18% and interest of 4% of delay. [18] The court found that the fact that after one month the Bank returned back the money that was given as loan to RUGANGO Dismas is contrary to the agreement signed by both parties on 26/11/2004 which could be executed following on article 33 of above said law, the BPR Ltd has to be accountable to his contract signed with RUGANGO Dismas which means that the appeal is received. 2. To know if civil damages requested by RUGANGO Dismas successors have to be given. [19] RUGANGO Dismas successors’ lawyer says that the bank did not consider opportunity that they were having into the project of transport four times in the road Nyamata-Kigali, with 17 passengers where each of them could be paid rwf600, which could be (600 x 17 x 4)= 40.800 per day, within 2 years the total benefits could be rwf25.459.200 accounted in the following way: [40.800 /day x (720days- 96 days) for 1day/week for taking the car into garage]. [20] He says that in general civil damages were deducted all expenses relating to fuel, salary for driver, and repairing equal to rwf23.799.072. [21] RUGANGO Dismas’ successor’s lawyer requested the court to order the bank to pay them rwf5.000.000 of damages relating to the fact of putting him to the list of entrusted clients, the fact that caused him to be replaced to the position of health District director of Bugesera, to become ordinary medical staff in gisenyi. He requested rwf1, 000,000 for lawyer honorary and rwf 1, 000, 000 of court fees. [22] the Bank’s lawyer says that the above said damages are without any legal bases since the bank has not violated any contract done with it client Rugango Dismas and any evidence of being putted into the entrusted clients was provided, and in case of contract violation, the interested parties would asked the other party to execute contract or to ask for it cancellation following articles of law. THE VIEW OF THE COURT

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[23] The fact that the plaintiff returned back after one month the money and without notifying any reason to the appellant, which is contrary to the contract signed and he has to be accountable of the illegal act because this has been a big obstacle to the business. Following on doctrines’ thoughts and jurisprudence civil damages relating to the loss of benefited chances are fixed by the judge on his/her own appreciation. (Le banquier est à priori libre d’octroyer ou non un crédit, mais cette liberté a des limites. Ainsi la banque qui laisserait penser son client qu’elle est disposée à lui consentir un concours, mais s’abstiendrait ensuite de passer à l’acte, serait fautive).1 [24] The court found that the fact of appropriation of the loan that was given to a client is considered as an illegal act that is risking the bank to be accountable for it and has to pay civil damages for that behavior. [25] regarding damages as requested by RUGANGO Dismas’ successors for the loss relating to the fact of misappropriation of the loan given which caused the failure of their project there is no evidence to prove that loss, but the true and objective is to have lose the chance (perte d`une chance) because the loan could be a benefit for him. The court found that following doctrines and other jurisprudences damages are subject to be appreciated by the judge, and orders rwf800.000 to be paid by the bank as civil damages. [26] The above said facts are equal to a decision rendered by this court into the trial nº RCOMA 0143/12/CS rendered on 11/10/2013, between ECOBANK and ECOGER, where the court decided that the fact that ECOGER was given a loan by ECOBANK and then the bank appropriated that loan, but ECOGER cannot base it request on it but on the opportunity which was not realized following on that illegal act of the bank. [27] Regarding to the lawyer and court fees, the court ordered the bank to pay rwf300.000 of court fees and rwf200.000 lawyer honorary. [28] Regarding the damages of being published to the list of entrusted clients the court found no reason of them. No evidence was provided (official letter) to prove that RUGANGO Dismas loosed his job position because of being putted into entrusted clients list.

[29] As court decided all damages to be paid by the bank are equal to rwf800.000+300.000+200.000 = rwf1.300.000. 3. Regarding to the appeal of BPR Ltd. [30] The lawyer of BPR Ltd requested damages of rwf1.000.000 of court fees and lawyer’s honorary. [31] The lawyer RUGANGO Dismas’ successors said that the bank knows well that is the one who caused all these issues and the court has to refuse receiving their appeal and request for damages. 1Sophie Sébastien, Droit du crédit, les instruments de paiement et de crédit, l’opération de crédit, Paris, Ellipses, 2007, p.152 (243).

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[32] The court found that the appealing for BPR Ltd is not received and it request of civil damages has no legal bases. III. THE DECISION OF THE COURT [33] The court orders that the appeal of RUGANGO Dismas’ successors is received on one part of it. [34] Orders that BPR Ltd to pay to RUGANGO Dismas’ successors civil damages equal to rwf1.300.000 [35] Orders that BPR Ltd to pay court fees equal to rwf 21.700.