[2015] UGHC 21

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT NAKAWA CIVIL APPEAL NO. 12 OF 2015

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BARCLAYS BANK OF UGANDA LTD. APPELLANT

# VERSUS

# GAMULI TUKAHIRWA RESPONDENT

*(Appeal from a decision of the ChiefMagistrates Court ofNabweru at Nabweru, before His Worship. Mr. Tweyanze Lawrence, delivered on the 11th day ofDecember, 2014. Arising'from Civil SuitNo. 41 of 2011).*

#### BEFORE: HON. LADY JUSTICE ELIZABETH IBANDA NAHAMYA

#### JUDGMENT OF THE COURT ON APPEAL

The Appellant,- Barclays Bank of Uganda Limited was the Defendant in Civil Suit No. 41 of 2011 at the Chief Magistrate's Court of Nabweru at Nabweru. In that suit, the Respondent, Mr. Gamuli Tukahirwa, had sued the Appellant , UGX 18, 840,000 (Eighteen Million, Eight Hundred and Forty Thousand Uganda Shillings Only) being monies jthat was unlawfully debited on the Respondent's account, interest of 35% on the principal sum, general damages for loss of business and of prejudicial ^B'\*^fVjnancial ability to carry out transactions and costs of the suit. The Chief Magistrate's Court found in favour of the Respondent/Plaintiff. The Trial J^jl'ourt ordered Jhe Appellant to refund a sum of. UGX 18, 840,000 to the gsphndifit.' interest' oh the UGX 18,840,000 at bank's rate of 32%, general maees *for loss of* business of UGX 5,000,000 (Five Million Uganda illings Only) and costs of the suit. Being dissatisfied with the decision of

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Lie Chief Magistrate, the Appellant lodged a Memorandum of Appeal on the 13^th February 2015 to the High Court of Uganda, at Nakawa *vide* High *Court* Civil Appeal No 12 of 2015.

# BACKGROUND OF THE APPEAL

The Respondent/Plaintiff, held Account No. 0191041402 with the Appellant's/Defendant Bank at the Appellant's Nakulabye Branch. It is alleged that one, Mr. Didas Tumusiime who also holds Account No. ,6002933037 with the Appellant's/Defendant Bank at its Kawempe Branch presented to the Appellant/Defendant Bank a cheque No. 000138, 'hereby referred to as the suit cheque' in his favour in the sum of UGX 18, 840,000 nd the Respondent's/Plaintiff's money was illegally withdrawn with the bove mentioned cheque.

#### EPRESENTATION

n Appeal, The Appellant was represented by Counsel David Semakula of essrs Masembe, Makubuya, Adriko, Karugaba & Ssekatawa Advocates MMAKS Advocates) whilst the Respondent was represented by Counsel lseph Zagyenda of Messrs Zagyenda & Co. Advocates. The Parties filed vritten submissions.

## ROUNDS OF APPEAL TO BE DETERMINED

Appeal, five grounds were formulated by the Appellant's Counsel. They

$\frac{1}{1}$ . That the Leaned Trial Magistrate erred in law and in fact in ruling that the evidence of both DW1 and DW2 was hearsay evidence;

That the Learned Trial Magistrate erred in law and fact by holding that the Appellant was negligent in the circumstances when it debited the Respondent's Account by a sum of UGX 18, 840,000;


- 3. That the Learned Trial Magistrate erred in law and fact in holding that the Respondent was not stopped from disputing the validity of the debit of the Respondent's account by a sum of UGX 18,840,000; - , 4. That the Learned erred in fact when he ignored the fact that the Respondent/Plaintiff had been contacted by the Appellant/Defendant to confirm the validity of the suit cheque and misdirected himself on the evidence of what a divert is, thereby reaching at a wrong decision; - 5. That the Learned Magistrate erred in law and fact when he failed to properly evaluate the evidence on record, thereby reaching at a wrong decision.

This Appeal seeks for Orders that;-

- The Appeal be allowed; a. - The Decision and Orders of the Lower Court be quashed/ set aside; b. - **c.** The costs of the Appeal and the Lower Court be provided for.

#### PRELIMINARIES

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Before this Court proceeds with the merits of the Appeal, it is necessary to point out a few procedural errors that were made by the Appellant. ^I note that this matter was placed before my brother, Justice Musene but later, the file was re-allocated to me. When the Parties appeared before me on the 23rd of October, 2015, Counsel Zagyenda, appearing for the Respondent, raised concerns regarding this matter. Mr. Zagyenda intimated Court that this is an old matter dating back in 2011. He told this Court that the Respondent'^s property is being attached by Stanbic Bank where he had secured a loan of UGX 94,000,000 (Ninety Four Million Uganda Shillings Only) which loan, he used it to repay his loans including the Appellant's loan which was advanced to him.

Counsel Zagyenda informed Court that the Respondent's property is being attached for failure to repay the loan. He prayed for the nearest Judgment


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**th** date. ^I had initially set the Judgment date for this matter on the II December, 2015 although I told the Parties that ^I would expedite the matter so as to deliver the Judgment before the set date. I have taken into consideration my schedule and a number of matters pending before me to be completed within the month of December. I have also taken into account the urgency of this matter. I make reference to the *Miscellaneous Application No. 752 of 2015.* The Applicant had sought for a Certificate of Urgency to hear this Appeal during the Court Vacation on grounds that the Applicant had a Judgment and a Warrant of Attachment in his favour.

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The Respondent attached the Appellant's vehicles and deposited the same in Court as guarantee for payment. Because of the Appellant's promise to pay the monies resulting from the main suit, an Interim Order was granted releasing the Appellant's property. The Appellant never paid the Respondent's money but instead, filed an Appeal before this Court. After further perusal of the file, I note that this matter had reached at a level of execution. See the letter dated 10th June, 2015 from the Respondent's Counsel addressed to the Chief Magistrates Court of Nabweru at Nabweru requesting him to transfer the file to the High Court, Execution Division for execution purposes. Mr. Charles Mwebaze T/A Supersonic Auctioneers & Court Bailiffs was instructed to carry out the execution.

The Appellant filed a Miscellaneous Application No. 62 of 2015 by way of Notice of Motion for interim Stay of Execution. By the Consent of the Parties', the Interim Stay of Execution was issued pending the determination of this Appeal. In the Affidavit sworn by Mr. Andrew Bwengye, in support of the Notice of Motion dated 11th March, 2015 the Appellant's Lawyer, clepWed-under paragraph-⁸—flia:t"'The—Apperiant—was\_\_WiriTnf~tU' "deposit'' " security in Court. The Appellant furnished Court with a guarantee of UGX 72,000,000.


It is important to note that the Judgment in the Trial Court was delivered on the 11th of December 2014 and not 8th of January, 2015 as purported by the Appellant'^s Counsel. *'Refer to the Judgment of the Lower Court at page 6.'*

### Duty of Appellate Court

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This is the first Appeal from the Decision of His Worship Lawrence Tweyanze, the Chief Magistrate, at Nabweru Chief Magistrates Court at Nabweru. ^I am alive to my duty as an Appellate Court. The duty of an Appellate Court is echoed in different jurisdictions. I am persuaded by the case of *Maimuna s/o Patrick Mutoo vs. Wilson Njau Nyaki, Civil Appeal No. 131 of 1994,* Where it was held that in the first Appeal, the Court is entitled to carry out a reappraisal of the evidence and draw its own conclusion from it. It can also interfere in the lower Court's decision if the Judge failed to take into account particular circumstances or based his impression on demeanor of witnesses which was inconsistent with the evidence.

In the same vein, the East African case of *Peters vs. Sunday Post Ltd [1958] EA 424,* the Justices of Appeal held that while an Appellate Court has jurisdiction to review the evidence to determine whether the conclusions of the trial Judge should stand, this jurisdiction must be exercised with caution. If there is no evidence to support a particular conclusion, or if it is shown that the Trial Judge has failed to appreciate the weight or bearing of the circumstances admitted or approved, or has plainly gone wrong, the Appellate Court will not hesitate to so decide. *See Watt vs. Thomas [1974] ¹ ALL ER 582, Astariko EA Abuli vs. Elifas M Ambaisi Civil Appeal No.228 of ------ 1998. -----*


^I am, therefore, cognizant of the duty of the first Appellate Court. This Court has jurisdiction to re-evaluate and review the evidence of the Lower Court. ^I believe that the role of the first Appellate Court was intended to correct an illegality/injustice that could have been occasioned by the Trial Courts. In order for this Court to ascertain whether the Trial Magistrate erred in his findings thus reaching a wrong Decision as presented in the Memorandum of Appeal, ^I will proceed to summarize the evidence of witnesses in the Trial Court.

### Witness Testimonies.

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PW1 (Gamuli Tukahirwa), a 38 year old man, a resident of Nansana, Wakiso District testified that he owned a poultry farm in Nansana. PW1 testified that he knows the Appellant/ Defendant since he has been banking with the Appellant Bank for a period of more than 4 (four) years at Nakulabye Branch. PW1 further testified in 2010, when he went to withdraw money using his cheque book, he discovered that two of his cheque leafs were missing, to wit, 00131 and 00133. PW1 immediately reported the matter to the Old Kampala Police Station and he was furnished with a letter which he took to the Appellant's Bank.

It was PWl's testimony that after presenting the Police letter to the Appellant's Bank, he was asked to write an application letter to stop the two missing cheque leafs from being used. The Respondent was charged UGX 50,000 (Fifty Thousand Uganda Shillings Only) per leaf. Hence he paid a sum of UGX 100,000 (One Hundred Thousand Uganda Shillings Only) for the two missing leafs. On the 25th of February, 2011, PW1 discovered that he had been defrauded to the tune of UGX 18,840,000 (Eighteen Million Eight Hundred & Forty Thousand Uganda Shillings only) after he had withdrawn a sum of UGX 400,000 (Four Hundred Thousand Uganda Shillings Only). On the 26th February 2011, he went to Kawempe Branch to report the issue.

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The Manager of Kawempe Branch, one Felicity Nakayima confirmed to PW1 that he had authorized a cheque payment of UGX 18,840,000 to one Tumusiime Didas, 'the fraudster'. The cheque leaf used for paying the fraudster was number 00138 but upon perusal of PWl's cheque book, the cheque leaf number 00138 was still intact. PW1 denied that signature appearing on the impugned cheque. He also denied being called by one, Agaba Hannington who alleged that PW1 had authorized the payment of the said cheque.

PW1 lodged a complaint at Kampala road branch where he was advised to do so. According to PW1, he met one, Grace Kyomuhendo, a trained Fraud Investigator, who advised him (PW1) to record a statement which he did. Grace also requested PW1 for his signature specimen. Miss Grace Kyomuhendo also confirmed that PWl's cheque leafs were intact except some two which were missing. Grace sent the cheque leaf to a hand writing expert. Upon further inquiry of who Didas Tumusiime, the fraudster was, the Police Officer, known as No. 32947 D/CPL Ogwang Charles, attached to Old Kampala Police Station went to search for the fraudster but in vain. The fraudster was a fictitious person.

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The fraudster had used a phone number 0702-111275 on the suit cheque admitted into evidence as P. Exh. 1. On the Account opening, the Fraudster used a different telephone number. Upon further research, it was discovered by D/CPL Ogwang that the Fraudster opened an account on the 5th of February, 2011. The fraudster used to communicate with one employee of the Appellant's Bank named as Grace at Kawempe Branch. The said Joyce of Kawempe Branch helped the Fraudster to open up an Account with the Appellant's Bank.

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It is interesting to note that Joyce used to communicate with the Fraudster often until the date of the illegal transaction, that is 21st of February, 2011. On the day of the illegal transaction, the Fraudster, Didas, had communicated with the Bank's employee, Joyce six times. It was further discovered that Joyce had a second line- 0717-773211 which she had used to communicate to the Fraudster at midnight, before the illegal transaction was initiated and completed. PW1 refuted the allegations that he diverted his phone calls. The MTN Printout was admitted in evidence as P. Exh.15.

PW1 pointed out that the Appellant's Bank has strict rules when opening an Account. He testified that in order to open an account, one is required to produce guarantors, substantive ID's like Voters Card or a Passport but for the case of the Fraudster, his Account was opened by Joyce using a Residential Card with zero balance, no guarantors and within a period of two weeks, the Fraudster made a transaction of UGX 18,840,000 using a cheque. PWl's number, 0782-185345 was cancelled from the cheque leaf and a fictitious number- 0702-111275 replaced. PW1 testified that by the time the fraud occurred, he had secured loans from different financial institutions including the Appellant's Bank. Therefore, he secured a loan of UGX 94,000,000 (Ninety Four Million Uganda Shillings Only) from Stanbic Bank, which loan he used it to pay off the loans that he had secured including the loan from the Appellant's Bank. See the loan offer, Annexture 'L' attached to the Plaint. The Respondent's loan offer was admitted in evidence and marked P. Exh.6.

PW1 told Court that he used to keep between 3500-4000 birds on his farm. He further informed Court that the life span of the birds was 6-8 weeks. During that period, PW1 testified that he would make profits of UGX 9 000,000-10,000,000. After the fraud, PW1 told Court that the birds were poorly fed and died. He remained with 1,000 birds which also died in the

 process. It was PW1's testimony that he lost profits and his business as well. PW1 prayed for refund of UGX 18,840,000 and interest on the same, costs and general damages. The receipts dated 24/9/2009, and 15/3/2012 were admitted in evidence and marked as P. Exh.7 and P. Exh.8 respectively while the invoices were marked as P. ID.9.

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In cross examination, PW2 confirmed that the cheque was written in favour of Didas Tumusiime dated 21st February, 2011 for UGX 18,840,000 with a cheque leaf number 00138. PW1 contended that he had never authorized any payment to one Didas. PW1 mentioned the two missing cheque leafs from his cheque book as numbers 000131, 000133. He told Court that the Appellant Bank received the cheque leafs and stopped payment of the two missing cheque leafs. PW1 reiterated his evidence in chief. He acknowledged having lodged a complaint at Police after he realized that he had been defrauded of his money. See the Police Report marked as D. Exh.1. PW1 also identified D. Exh.3 which is a Court Order, Miscellaneous Application No. 165/ 2011 dated 2^rd March, 2011 allowing the D/CPL Ogwang Charles to get the printouts for prepaid call data from Warid Telecommunication.

According to the printout by the MTN Uganda Security Department, it is indicated that the Appellant Bank called the Respondent two times from the number 0414568598-0782186345 on the day when the transaction took place but the Respondent's line was diverted to number 0778-731612. It is worth noting that the Appellant's Bank called the number to which the divert was made, 0778-731612 for three times. The Fraudster was in Kazo. It is further evidenced that the phone number that was used by Didas to open an Account- 0702-112575 communicated with the number to which the divert had been made on 0778-731612 12 times.


PW2 (Apollo Mutaswera Ntarirwa), a Government Analyst of questioned documents attached to the Ministry of Internal Affairs Police Headquarters with the Scientific Aids Laboratory in Naguru testified that he received a cheque from the Head of Security and Fraud Management in the Appellant's Bank. The suit cheque was in respect of establishing whether or not the questioned signature and the hand writing on the said cheque had been written by the writer whose specimens were given. The specimens were on three sheets marked P. Exh. B1, a Police Statement of Tukahirwa Gamuli, PW1's signatures on P. Exh. B2, B3 and P. Exh. C1 and his handwriting on P. Exh. C2, C3 and C4. PW2's findings were that the questioned signature and handwriting appearing on the cheque and on the specimens as provided are significantly different. He explained the differences in different letters.

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In PW2's opinion, there was no evidence to prove that the questioned signature on the cheque was executed by the writer of the specimens. PW2 made a report. It was tendered in evidence as P. Exh.9. In cross examination, PW2 maintained the fact that the cheque and the specimens were written by different persons because of the differences that were highlighted in P. Exh.9, the report made by PW2 after his findings.

PW3 (No. 32947 D/CPL Ogwang Charles) attached to Old Kampala Police Station testified that the Respondent reported a case of fraud alleging that his money had been withdrawn from the Appellant's Bank at Kawempe Branch. It was PW3's testimony that in order to determine whether the Respondent's money had been withdrawn, he swore an Affidavit in Court for purposes of being granted an order to inspect the Respondent's Account. The Court Order dated 3^rd March 2011 was granted to PW3. It was admitted in evidence and marked as P. Exh.13. PW3 confirmed that the amount of UGX 18,840,000 was transferred to the Fraudster's Account, Didas Tumusiime.


According to PW3, he searched for Didas but in vain. This prompted him to inspect Didas's Account. A Court Order date 4th March 2011 was issued in respect of inspecting the Fraudster's Account. PW3 inspected Didas's Bank Statement and he discovered that the money had already been withdrawn within two days and no money was left in the account. See P. Exh.15. It should be noted that it was PW3 who collected the results of the Forensic investigations. PW3 testified that he had received an MTN printout. This was for purposes of establishing whether there was communication between the Appellant Bank and the Respondent between the 21st of February, 2011 and 28th of February 2011. PW3 testified that the print out showed that there was communication between the two Parties.

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PW3 further told Court that he also got a print out from Warid Telecommunication. He established that for the period between 1/1/2011- 8/3/2011, there was communication between Didas and a Bank Official even at late hours like 12:07 AM. The bank official, named Nabukenya Joyce, was using two lines, namely; 0717-773211 and 0774-252409. Joyce Nabukenya was communicating to Didas on 0702-112575. Another printout from MTN indicates that there was communication between the Bank and the number - 0778-731612 to which the Respondent's phone number had been diverted to. PW3's findings were that there was no direct communication between the Appellant Bank and the Respondent. PW3 inquired from Joyce Nabukenya the reasons why she was communicating to a client in the wee hours of the night. Joyce's response was that she had seen the Client (Didas) withdrawing large sums of money from the Account in a fast manner and that Joyce was just a Bank Official who was exercising her duty of communication with the Bank's clients. PW3 did not controvert himself in -------Truss'examination: '


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DW1 (Felicity Nakayima), a Bank Official testified that the Respondent went to her office with a balance inquiry slip requesting to know how much was in his Account. According to DW1 she confirmed that the Respondent had a balance of UGX 2,000,000,-3,000,000. This did not auger well with the Respondent. Upon inquiries being made by DW1, she found out that there was a transfer of UGX 18,840,000 from the Respondent's Account to the Account of one, Didas Tumusiime through a cheque. DW1 told Court that when a cheque is issued, it is subjected to UVC ULTR violet light to check for specific features. DW1 told Court that if the cheque is beyond one million, the Cashier's Supervisor has to call the issuer of the cheque in order to find out whether he issued the cheque.

DWl's testimony was that the Supervisor, Agaba Hannington, had called the Respondent who confirmed the payment of the cheque to Didas Tumusiime. She acknowledged that the Respondent's number had been crossed out and replaced with Didas's number. In my view, this act of crossing the Respondent's number and replacing the same with the Fraudster's number should have caused some suspicion with the depositor of the cheque. DW1 further informed Court that Didas opened an Account using a Village I. D card and a passport size photo and that one does not need a referee to open an Account with the Appellant's Bank.

In *cross* examination, DW1 told Court that she found out that the number provided by Didas - 0702111275 was not his number. In addition, the phone number that he provided while opening an Account was a different number. DW1 testified that she discovered Didas's phone difference in 2013 when this matter was in Court. It was DWl's admission that in case of any •crossings, especially •in-the phone numbers, such-actions raise questions-.

DW2 (Grace Kigozi Kyomuhendo), an Investigator in Fraud and Investigation Department. DW2 testified that the Respondent complained of being defrauded, of his money by way of a cheque to the tune of UGX 18,840,000. DW2 found out that the cheque leaf that was used by the fraudster, 00138, was still intact in the Respondent's cheque book. After seeking an expert opinion from *De La Rue* Company regarding the said cheque, it was discovered that the cheque which was thought to be 00138 was actually 00133. This was confirmed in its report marked as D. Exh.5.

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DW2 told Court that among the lost cheque leafs for the Respondent was 00131 and 00133. This means that the cheque number was changed from 00138 to 00133. DW2 further testified that although the Respondent was contacted, he did not receive any call because his phone was diverted to unknown number - 0778731612. DW2, made report according to the investigations carried out. See D. Exh.7. She found that Didas Tumusiime's Account was new opened on the 5th February 2011 and there were several transactions that were carried out on Didas's Account before the fraud; no staff was involved in the fraud; the cheque leafs numbers 00131 and 00133; cheque number 00133 had been changed to 00138; whoever made the erases on the stopped cheque 00133 had knowledge that the said cheque had been stolen and stopped in the system and that the Respondent's cheque leaf no 00138 was still intact in the customer's cheque book.

During cross examination, DW2 stated that there was a possibility that someone could have directed MTN to divert the calls to other numbers in order to execute the fraud. DW2 faulted the procedure used by the Appellant' Bank in calling customers to ascertain the veracity of documents. According to her, It Is not easy to determine whether the person being talked to on the phone is the actual person who is entitled to give his

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authority as to whether the Bank should pay the holder of the cheque in question.

## RESOLUTION

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I now turn to the issues raised in the Appeal. I have critically and carefully perused the proceedings and the Judgment of the Lower Court. I have also paid due respect to the written submissions of the Respondents. I will not repeat what the Parties' have submitted on but from the onset, the issue for determination in this Appeal, according to me, would be:

- a) Whether the Appellant was negligent in debiting the Respondent's Account and: - b) Whether Appellant is liable to repay the Respondent's money; - c) The remedies available to the Parties.

Having perused the Proceedings of the Lower Court, it is not in dispute that the Respondent held an Account number 0191041402 with the Appellant's Bank for a period of more than four years. It is also not in dispute that before the fraud incidence, the Respondent had a balance of over UGX 21,000,000 but was defrauded UGX 18,840,000. ^I am cognizant of the role of this Court as a first Appellate Court is to re-evaluate the evidence on record and come up with an independent conclusion. *See Fr. Narsensio Begumisa & 2 Ors vs. Eric Tibebaga, SCCA No. 17 of 2002.*

I have re-evaluated the evidence on record. ^I will not fault my Brother, His Worship Lawrence Tweyanze. He properly evaluated the evidence presented before him by the Parties in the Trial Court. According to me, His Worship analyzed the evidence on record and the submissions of the Parties' and he rightly pointed out in his Judgment. See pages 2 and 5 of the Lower Court's Judgment. I conquer with the findings of the Trial Magistrate. ^I need to note that the investigations carried out by PW2 and PW3 clearly

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indicated that the cheque in issue was a forgery especially the signature specimen. The cheque number 00138 that was used to pay the fraudster had been altered to 00133. The Respondent's cheque leaf, 00138 was still intact by the time he made a complaint regarding the missing leafs.

Suffice to note the fact that by the time the Respondent presented his complaint, the Bank had used cheque number 00138 to pay Didas. At the back of the cheque, the Respondent's phone number had been erased and replaced with the Fraudster's fictitious number which was different from the one that was used while opening an account. This fact was ignored by the Appellant's Bank at the time of the transaction. If the Bank officials had exercised due diligence on this matter, they would have noticed that Didas was a fraudster.

^I find it interesting that the Bank paid Didas on cheque number 00138 when actually a report from *DeLaRue* Company which gave an expert opinion regarding the cheque in issue, revealed that the said cheque had been changed from 00133 to 00138 as indicated in D. Exh.5. ^I have closely looked at the D. Exh.5. For the sake of clarity, I will reproduce its findings. *"We confirm that that the original number of the cheque was 000133 and not 000138 as indicated in the cheque. Both the MICR number and personalization number on the top right corner have been altered to indicate 000138. We have undertaken a MICR check on the code line on our MICR qualifier and this confirms the original cheque number as 000133"*

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^I make reference to the evidence of DW1 (Felicity Nakayima). She told Court that the act of crossing the Respondent's number and replacing the same with the Fraudster's number should have caused some suspicion with the depositor of the cheque. It should be remembered that in cross examination, DW1 told Court that she found out that the number provided

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by Didas - 0702-111275 was not his number. In addition, the phone number that he provided while opening an Account was a different number. DW1 discovered Didas's phone difference in 2013 when this matter was in the Lower Court. It was DWl's admission that in case of any crossings, especially in the phone numbers, such actions raise questions.

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In her report, DW2 (Grace Kyomuhendo) noted that there must have been a person who made the erases on the stopped cheque of 00133 had knowledge that the Respondent's cheque leafs number 00131 and 00133 had been stolen and the same had been stopped from further transactions in order to avoid any consequential loses. In cross examination, DW2 stated that there was a possibility that someone could have directed MTN to divert the calls to other numbers in order to execute the fraud. DW2 faulted the procedure used by the Appellant' Bank in ascertaining whether the Respondent had given the bearer of the cheque the authority to be paid using the same. From the above analysis, the Bank ignored to take precautionary measures against the fraudulent cheque. Hence, it cannot escape liability.

With reference to the attached Statement of Account of the Respondent attached to the Plaint, the Statement shows that the Respondent made a cash deposit of UGX 20,000,000 (Twenty Million Uganda Shillings Only) on the 3rd of February 2011. Having also read the report of DW2, Didas Tumusiime opened an Account with the Appellant Bank on the ⁵th of February 2011. It was the testimony of the Respondent and I also note it from the Warid Prepaid Call Detail printout that the mentioned Bank employee, one Joyce Nabukenya, started communicating with the Fraudster using her UTL and MTN lines on 0717-773211 and 0774-252409 respectively. With the UTL number she communicated on 5/2/2011,

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^I wish to further point out that the holder of the MTN number which the Respondent's call was diverted to - 0778-731612 also reveal that they communicated a lot with the Fraudster on 21/2/2011 (2 times), 22/2/2011, 24/2/2011 (13 times). Furthermore, a print out from MTN, P. Exh.17 reveal that between 19/2/2011-24/02/2011, the fictitious number-0778-731612 called Didas 12 times. Then on 21/2/2011 when the cheque was being executed, the Fraudster, Didas called the unknown holder of the fictitious number two times between 9:56 AM and 10:15 AM. Meanwhile, the Appellant Bank tried to call the Respondent but his number was diverted to the fictitious number which was communicating with Didas.

Accordingly, based on the evident record of the lower Court and considering the Appellant's witnesses who confirm that the Appellant was negligent on how it handled the case, it is my considered opinion that the Trial Magistrate took into account all the evidence. He also considered the supporting documents and the submissions of the Parties. Thus he came to the right conclusion in holding that the -Appellant was negligent in executing its duties thereby depriving the Respondent of his money. It is my finding that the Trial Magistrate properly evaluated the evidence on record thereby reaching the correct Decision. Therefore, the five grounds of Appeal are hereby dismissed.

## Remedies Available to the Parties.

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Before taking leave on this matter, the Trial Court ordered the Appellant to refund a sum of UGX 18, 840,000 to the Respondent, interest on the principal sum of UGX 18,840,000 at bank's rate of 32%, general damages for loss of business of UGX 5,000,000 (Five Million Uganda Shillings Only)

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and costs of the suit. The Respondent was not satisfied with the award of general damages of UGX. 5,000,000 awarded by the Trial Magistrate. It was the submission of the Respondent he was earning between UGX 9,000,000- 10,000,000 per month. The money was stolen in Feb 2011. Since then the Respondent had spent 45 months without earning from his business.

In the alternative, the Respondent submitted that if Court cannot give the highest amount of general damages required, at worst, it should consider that even if he was earning UGX 1,000,000 per month, although it was not the case in this matter, the Trial Magistrate would have awarded the Respondent a sum of UGX 45,000,000-as general damages. He asked this Court to award him the maximum general damages of the loss of his business, interest at 35% and costs of the suit.

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According to the Respondent's testimony, he was a Poultry farmer who kept between 3500-4000 birds. The birds had a life span of 6-8 weeks whereby he would earn between UGX 9,000-10000 million shillings per month. Having looked at the Respondent's sales receipts and invoices marked as P. Exh.7, P. Exh.8 and P. Exh.9, ^I note that the Respondent would make sales of about UGX 9,000,000 for two months. Therefore, his monthly income would be UGX 45,000,000 or more. The Respondent lost his business in February 2011 after being defrauded of his money. He has since then, being struggling to repay the loan that he had secured from Stanbic Bank. It has been close to 60 months from the time his business drained.

It is my finding that although the Trial Magistrate awarded the Respondent general damages of UGX 5,000,000, he did not consider the Respondent's submissions on the issue of general damages. In my opinion, the award of general damages to the Respondent by the Trial Magistrate was exceedingly low. I am aware that the Appellate is under no duty to interfere with the


award of damages that have been awarded in the Lower Court unless the award is too low or too high and that certain principles were not taken into account.

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The award of damages is a matter of judicial discretion. In *Patel vs. Samaj (1941) 11 EACA,* the Court of Appeal held that in order to justify reversing the Trial Judge on the question of the amount of damages awarded, Court should be convinced either that the Judge acted on some wrong principle of the law or that the amount awarded was so extremely high or an entirely erroneous estimate of the damage to which the Plaintiff is entitled to. The questions to be answered are whether or not the Trial Magistrate acted on wrong principles and that no Judge, who is awake of the facts of the case would have come to that conclusion. This notion was also stated in the case of *Ratman vs. Cumarasamy & Anor [1964] 3 ALLER ER 933,* where it was held that the exercise of discretion is not to be interfered with unless it is shown that it was exercised on a wrong principle. I am persuaded by the decision of the Court of Appeal of Kenya in the case of *Jahendra Kumar Haria vs. Abdulrasil Hussein, Civil Appeal No. 20 of 1996,* it was held that an Appellate Court only interferes with an award of damages if it is satisfied that the Judge either took into account an irrelevant factor or left one or, short of this, that the amount awarded is so inordinately low or high that it must be a wholly erroneous estimate of damages.

I appreciate the fact that the award of damages is a matter of judicial discretion but this should be exercised with care so as not to put a Party in a disadvantaged position. The object of an award of damages is to give the Plaintiff compensation for the damage, loss or injury he or she has suffered. *See Robert Coussens vs. Attorney General Civil Appeal No. 8 of 1999.* Fair compensation should be awarded for the injuries suffered. The amount should not be overly generously or too little. It should be a realistic

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assessment to compensate a victim for all he has suffered; for all he will have to suffer and for all that which he will have to pay as a direct result of the accident while taking into account the circumstances of the case.

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In Sosphinaf Company Limited & Another vs. Daniel Ng'ang'a Kanyi Civil Appeal No.315/01 (Kenya Court of Appeal), delivered in 2006, the Honourable Justices of Appeal held that the assessment of damages is a difficult task and the Court is required to give a reasonable award which is neither extravagant nor oppressive and ultimately, what is reasonable award is an exercise of discretion by the trial Judge and will invariably depend on the peculiar facts of each case.

Having held that the Appellant Bank was negligent in its duty of care towards the Respondent, the Appellant's negligence caused the loss of the Respondent's business, monthly income, profits and even capital. This is an era whereby money is scarce and the prices of the basic needs common commodities have shot up by a very big percentage. People are resorting to private employment because of the nature of the steadfast growing economy which one need to have the available resources in order to cater for the needs of others especially where a family is involved. The Respondent's business was a profitable business whereby he would earn large profits within 6-8 weeks. This has been hampered leading to loss of income and future prospects.

This has been held in the case of Attorney General vs. Waiyera Civil Appeal No. 85 of 1982; 1 KAR 84. It was held that the loss of earnings on future promotions and prospects of promotion should be taken into account when awarding general damages. Auni Bakari & Anor vs. Hadija Olesi Civil Appeal No 70 of 1985. It was held that in awarding damages, the Judge should take into account of the fact that money can be invested. Net loss of

earnings must be the difference between what the Plaintiff would have earned if there had been no injury and what will be earned after the injury. I have taken note of the above enunciated principles.

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In his submissions, the Respondent asked for UGX 9,000,000-10,000,000 as being appropriate to what he would have earned if he had not been defrauded. At the time of the Lower Court's Judgment, the Respondent had spent 45 months without income. In essence, if one was to award the Respondent the damages claimed for, he would have been awarded damages to a tune of approximately UGX 400,000,000. In the alternative, the Respondent sought for UGX 1,000,000 per month for 45 months which would have added to UGX 45,000,000. In my view, the Trial Magistrate did not take into account the considerations for the award of general damages. The award of UGX 5,000,000 as general damages were therefore inordinately low.

In the case of *Echen Agencies and Another vs. Naomi Rimbui Palma and others, Civil Appeal No. 140 of 1998; [1998] LLR 767 (CAK) (Gicheru, Omolo and Lakha JJA on March 1999).* Court held that an Appellate Court only interferes with the findings of fact if it is satisfied that the Trial Judge was wrong and not just that it (the Appellate Court) might have arrived at a different conclusion. It was further held that an apportionment of liability can only be interfered with in exceptional cases where there erroneous. Similarly, in the case of *Leo Sila Mutiso vs. Rose Hellen Wangari Mwangi, Civil Appeal No.255 of 1995,* my Kenyan Brothers, the Justices of Appeal, Gicheru, Lakha and Bosire JJA, held that an Appellate Court will not interfere with the exercise of discretion unless it is satisfied that it is clearly wrong, because it has misdirected itself or acted on matters which it should have not acted or failed to take into consideration matters which it should have considered and in so doing, it arrived at a wrong conclusion.


It should be noted that any awards that are to be granted must be fair and reasonable. The amount awarded should be moderate, fair, and not extravagant. See *Warren vs. King [1963] 3 All ER 521* and *H West & Son Ltd [1964] AC 326. Samuel Phillip Kidoti vs. Kenya Cargo Handling Services Ltd, Civil Appeal No. 76 of 1992.* It was held that the changes in the economy and in the value of the money must be taken into account. It is my view that the Respondent is entitled to a reasonable award of damages. The Respondent did not plead special damages yet there are documents on record to prove that he is entitled to them. Nonetheless, he did not plead them, thus, ^I will not delve on the issue of special damages. Looking at all the existing circumstances and the principles in the above cites cases, ^I find it reasonable to quash the amount of UGX 5,000,000 as damages awarded by the Trial Magistrate. I am inclined to award UGX 60,000,000 (Sixty Million Uganda Shillings Only) as general damages to the Respondent for the loss of the loss, pain and suffering.

## Interest

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The Respondent prayed for interest of 35 % on the principal sum of UGX 18,840,000. The Trial Magistrate awarded him interest of 32% being the interest that he was charged while servicing the loan. I will not interfere with the interest of 32% awarded by the Trial Magistrate. In *Samuel Phillip Kidoti vs. Kenya Cargo Handling Services Ltd, Civil Appeal No. 76 of 1992.* It was held that general damages bear interest from the date of Judgment while Special damages bear interest from the date of filing of the suit. Similarly, in the case of *Fernandes vs. the people [1972] EA 62.* It was held that interest on general damages as opposed to special damages does not run from the time of filing the suit but from the date of Judgment. *See also Chege vs. Vesters Volume ¹ KAR 1192.* The Respondent is awarded an interest rate of 32% on the principal sum from the date of filing this case in the Lower Court until payment in full. The Respondent is also awarded 25%

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on the award of general damages from the date of Judgment in the Trial Court till payment in full.

## *Costs*

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In the case of *A Societe Internationale De Telecommunication Aeronautiques (SITA) vs. Twiga Propertie Ltd, High Court Civil Suit No. 68 of 1991.* It was held that costs follow the event unless otherwise ordered for good reasons. According to the provision of Section 27 of the CPA, a successful Defendant is entitled to costs unless there is a good reason to be stated. The costs of this suit both in the Lower and in this Court are awarded to the Respondent

From the above reasoning, ^I would consider that the matter was judiciously dealt with by the Trial Magistrate and this Appeal is HEREBY DISMISSED. Taking all the above into consideration, ^I award the Respondent;

- *1. An Order for the refund ofthe principal sum ofUGX 18,840,000;* - *2. An Order granting UGX 60,000,000/= as general damages for the loss of business;* - *3. Interest of 32% on (1) above from the date of filing the suit till payment in full;* - *4. Interest of 25% on (2) above from the date of the Lower Court's Judgment till payment in full;* - *5. The payments on 1-4 shall be paid within a month from the date of this Judgment;* - *6. The Interim Order for Stay of Execution vide Miscellaneous Application No. 62 of 2015 is hereby lifted;* - *7. Parties are directed to file a progress report to Court within a month from the date of this Judgment in order to consider the matter disposed off;*

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8. The Appellants shall pay the costs of this Appeal and in the Lower Court.

SIGNED: .................................... HON. LADY JUSTICE ELIZABETH IBANDA NAHAMYA **JUDGE**

$13$ ^TH NOVEMBER, 2015

24 $150$