[2022] UGSC 5

## THE REPUBLIC OF UCANDA

## IN THE SUPREME COURT OF UGANDA AT KAMPALA

Coram: Ozuiny-Dollo, CI; Opio-Aweri, Mwondha,Tuhaise €s Chibita, ilSC

### CIVIL APPEAL NO.16 OF 2021

Basiima Kabonesa Appellant

#### Versus

#### 1. The Attorney General

2. Coffee Marketing Board (In Liquidation) Respondents

[Appeal from the Judgement and Decree of the Court of Appeal in Ciail Appeal No. L96 of 20L8 before Kiryabuire lA, Mugenyi lA, and Kasule Ag. lA, dated the 15ttt April202Ll

## Judgment of Percy Night Tuhaise, ]SC

This is a second appeal arising from the decision of the Court of Appeal which upheld the decision of the High Court in Civil Suit No. 259 of 2074 and consequently dismissed Civil Appeal No. 196 of 2018. 6

#### Background of the appeal

The brief background of this appeal, as can be deduced from the record of appeal, is that 1,568 non-unionized workers, who were former employees of Coffee Marketing Board, a limited liability company fully

owned by the Government of Uganda, were retrenched between 1991 and 1998, following the divestiture of the 2".1 Respondent undcr thc Public Enterprises Reform and Divestiture Act, Cap 98. The 1,568 former employees continued to claim outstanding terminal benefits following their rctrenchment. Thcir claims wcre subsequently verified by the officc of the Auditor General in the sum of Uganda shillings L0,330,013,506/: (ten billion, three hundred and thirty million, thirteen thousand five hundred and six). When thc vcrificd amount in terminal benefits was presented to the Government of Uganda Privatisation Unit for payment, despite a legal opinion from the office of the Attorney General (l"tRcspondent) to effect the payments, the Privatisation Unit did not effect immediate payment. S(

I

In 2074, as a result of the delayed paymcnt, Basiima Kabonesa (the Appellant in this appeal), together with Adumo Solome and Musoke james, on behalf of the 1,558 non-unionized formcr employecs of the 2"d respondent, filed a rcpresentative suit (as paupers) against the defcndants at the High Court. Thcir claim against the defcndants (respondents at the Court of Appeal) was for non-payment of their terminal bcnefits, as well as general, special, and aggravated damages, togcther with interest and costs of the suit.

On 22"d July 2015, a consent was cntered bctwcen thc parties on the following terms:-

"1,. The plaintffi slnll be pnid n total wm of UGX 70,330,073,506= (Uganda Shillings ten billion, three hundred and thirty ruillion, thirteen thousand fae lrundred and six) as tlrc total terminal benefts for the nonunionised fornrer employees of Coffee lvlarketing Board tuho uere retrenched betzueen tlrc period 1992-7998 in accordance uith the aerification report of tlrc Auditor General dated 13il' Noaember 2009.

2. Each plnintiff slull be paid UGX 10,000,000= (UGX ten million only) as General damages.

3. lnterest shall be paid on generd danmges nt court rote.

4. The issue of costs of the suit, Aggraonted dnmnges and interest on tlrc terminal benefits are hereby referred to court for determination."

The three issues bcforc the High Court were, whether the plaintiffs were entitled to costs of the sui| whcther the plaintiffs werc entitled to aggravated damages; and whether the plaintiffs were entitled to an award of interest on the terminal benefits. The learned trial Judge awarded thc plaintiffs costs in terms disbursement and not instruction fees; aggravated damages totaling a block figurc of Uganda shillings 1,000,000,000/: (one billion) to be sharcd equally by the plaintiffs; interest on the principal sum of 70% per annum; and interest of the aggravated damages at 6% perannum. .,6

The appellants (plaintiffs at High Court) appealed to the Court of Appeal against the block award of the Uganda shillings

1,000,000,000/= to be shared among the parties, which, when shared, came to Uganda shillings 637 ,755 / : for each of the 1,568 claimants. The appellants were also aggtieved that 10% interest on the principal sum was too low; and that it was to run from thc date of the consent judgment as opposed to the date of retrenchment. All the grounds of appeal before the first appcllatc court failed. The appellants were condemned in costs in that court, but each party was to bear their own costs in the irial court.

.l

Basiima Kabonesa, the Appellant in this appeal, was dissatisfied with the decision of the first appellate court. He filed this appeal, Uased ofu( grounds that:-

- 1. The learned ]ustices of the Court of Appeal erred in law when they failed in their duty as a first appellate court to review and re-evaluate the evidence on record thereby arriving at wrong deducti ons/c o ncl us i ons. - 2. The learned |ustices of the Court of Appeal erred in law in holding that terminal benefits are not the same as special damages, thereby denying an award of interest from the date of accrual of special damages. - 3. The learned ]ustices of the Court of Appeal erred in law in holding that the award of aggravated damages of UGX 637,755 to each claimant was an appropriate award for them.

- 4. The learned ]ustices of the Court of Appeal erred in law in holding that there was no reason to interfere with the trial court's award of a 10% p.a. interest rate on the Appellants' terminal benefits. - 5. The learned justices of the Court of Appeal erred in law in holding that the trial judge exercised his discretion well under section 25 (2) of the Civil Procedure Act in awarding interest on terminal benefits from the date of the consent judgment.

#### Representation

At the hcaring of this appcal, the Appellant was represented by Counsel Raymond Mwcbesa from M/S Kampala Associated Advocates. The 1't Respondent was represented by Ojiambo Bichachi, a State Attorney in the Attorney General's chambers.

# Parties to the Appeal rr,t^

At the High Court, this matter commenced as a representative suit by Basiima Kabonesa, Adumo Solome and Musoke Jamcs, representing "1,568 former employccs of the 2"'1 Respondcnt. The same representativcs were maintained at the first appellate court. In this Court, however, Basiima Kabonesa is the sole Appellant. There is no indication as to why the other representatives are no longer parties to this appeal. Nonetheless, the submissions and prayers indicate that Basiima Kabonesa still reprcsents the 1568 claimants' intcrests.

The parties in this appcal filed writtcn submissions.

#### Submissions

Counsel for the Appellant madc a general submission that the Appellant is not only dissatisfied with the decision of the Court of Appeal, but also thc total failure by it to carry out its duty as a first appellate court, of reviewing and re-evaluating the evidence on record, thereby arriving at wrong deductions or conclusions. Counsel then submitted on each ground separately, starting with grounds 2 to 5, and, lastly, ground 1.

,6

#### Ground 2

Counsel for the Appellant referred this Court to thc amcnded plaint at pages 236, 247, and 25U to 309 of thc rccord of appcal and submitted that the terminal benefits were claimed as special damages; that the Auditor General's report constituted the specific proof thereof. He questioned where the Court of Appcal got its evidcncc from when it reached the conclusion that, " terntinal beneftts are not special dantages basing this fnding on s tacit acknoruledgment by tlrc plaintiffs in their amended plnint." Counsel rclied on the decision in the case of Omunyokol Akol |ohnson V Attorney General, Supreme Court Civil Appeal No. 6 of 2012 to support his argument that transport allowances to transport a tcrminatcd cmploycc's pcrsonal effects to his homc, as well as salary arrears, constituted spccial damages. He further

submittcd that a perusal of the Auditor General's report indicates that the terminal benefits included transport allowance and salary arrears.

Counsel accordingly prayed to this Court as a second appellate court to exercise its power of intervention in considcring each ground of appeal. In the alternative and without prejudice, Counsel prayed that, should this Court find that the Court of Appeal rightly exercised its duty as a first appellate court, then it should consider each ground on a pure point of law. .\*16.

In reply, Counsel for the 1't Respondent submitted that it is trite law that special damages must be specifically pleaded and proved, on the balancc of probability,by the party claiming the same, where a suit proceeds inter parties or ex parte. He referred this Court to MC Gregor on Damages 4th Edition page 1028, which states that the evidence in special damagcs must show the same particularity as is necessary from its pleading. He contended that such evidence should therefore, normally consist of evidence of particular losses such as the loss of specific customers or specific contracts; and that, however, with the proof as with pleadings, the courts are realistic and accept that the particularity must be tailorcd to the facts.

Counsel also submitted that there was no error in law or fact when the Iearned Justices of the Court of appeal, at page 236 of the record of appeal, hcld that though a claim for special damages was in the

pleadings before the trial court, such claim was not among the remedies sought following the consent judgment; that at trial, the appellants only sought interest on terminal benefits, which cannot be the same as special damages; and that this was tacitly acknowledged by the appellants themselves in their amended plaint which distinguished their claim for verified terminal benefits from that in respect of special damages. nrN

In rejoinder, Counsel for the Appellant subrnitted that the vcrification of terminal benefits by the Auditor General did not create the claim which was already existing; that even in the amended plaint, the claim for terminal benefits being special damages was not distinguished at all. He argued that the terminal benefits constituted special damages; that it is trite law that terminal benefits are special damages and must be claimed as special damages; that, indeed, the special damages (being terminal benefits) were specifically pleaded in this matter as indicated in the Auditor General's report of 2009; and that the fact that they were consented to rather than bcing specifically proved does not take away the fact that they are still special damages. He relied on the case of Seraphin Obwolo V Barclays Bank [L994] 3 KARL 10L, in which court cited john Eletu V Uganda Airlines Corporation [1984] HCB 391 to support the argument that salaries and other terminal benefits should be claimed by way of special damages.

#### Ground 3

Counsel for thc Appcllant, after highlighting the rationale for the award of aggravated damages, submitted that the learned trial |udge took cognizance of the same whcn he made the award of aggravated damages against the defendants. He submitted however, that it was an error on part of the learned trial Judge to award a paltry sum of Uganda shillings 637,755/: as aggravated damages to each claimant on the basis that government had already made concessions involving colossal sums of money the payment of which will involvc spending public money. He also faulted the Court of Appeal for holding that it was not government's " reluctance" to pay terminal benefits but rather, that the delay was because the claim requircd intricatc attention to avoid doublc payment and other accountability issues. According to Counsel, such finding was not based on the weight of the actual evidence adduce<l and found on record. .,, r{

Counsel submitted that it is their callous and criminal treatment by Government that qualified the Appellants for an award of aggravated damages, which was squarely based on their tcrmination without payment. He argued that, to base the delay on financial due diligence is to miss the uniquc facts of the casc, particularly the twenty-year delay to conduct a verification exercise, and the five-year delay to pay even after financial due diligence (which was carried out in only a month) had been completed.

According to Counsel, in disrcgarding this evidence on record, the Court of Appeal failed in its duty as a first appellate court.

Counsel further submitted that the award of Uganda shillings 1,000,000,000/: (one billion) appears to be a lot,, but when it is applied to the 1,568 individuals individually, it is not an aggravated damagc. He submitted that the award was not sufficient to punish or deter the Govcrnment's cgrcgious, high handedness, malicious, vindictive, oppressive and/ or malicious conduct. \*(6

Counsel also argued that the Court of Appeal erroneously failed to award aggravated damagcs that are in linc with the established amounts awarded in the recent past by this Court, like in Bank of Uganda V Betty Tinkamanyire, SCCA '1,2 of 2OO7, where the respondent was awarded aggravated damages of Uganda shillings 100,000,000/: (one hundred million); in Frederick Zaabwe V Orient Bank Ltd & Others, SCCA 4 of 2OO6, where the appellant was awarded aggravated damagcs of Uganda shillings 200,000,000/: (two hundred million); and, pcrsuasively, in Uganda Revenue Authority V Wanume David Kitamirike, CACA 43 of 2O10, where the Court of Appeal awarded the rcspondent aggravatcd damages of Uganda shillings

100,000,000/: (one hundred million). He contended that the said cases were erroneously distinguished by thc Respondent's counsel.

In reply to ground 3, Counsel for the 1't Respondent, after highlighting the nature of, and rationalc for, aggravated damages, submitted that for damages to qualify as aggravated, there must be proof of evidence of the malicious actions or ornissions of the defcndant compounding the illegality. He relied on the already cited case of Fredrick l. K Zaabwe V Orient Bank Ltd & 5 others to support his argument. \_il(

Counsel for the 1't Respondent contended that the learncd Justices of Appeal alluded to the evidence of the alleged " callous conduct" of Government in delaying to pay the appellants their terminal benefits, which conduct was sufficiently compensated, even though each plaintiff got Uganda shillings 637,755/:. Hc argued that this figure in itself does not mcan that the " callous conduct" was not compensated just because the figure is, according to the Appellants, low. He argued further that the quantum awarded in aggravated damages is at the discretion of court and has to be excrcised judiciously.

Counsel also contended that thcre is no mathematical formula for calculating the quantum in aggravated damages, that their assessment is mainly guided by the value of thc subject matter, the economic inconvenience a party may have been put through, and the nature and extent of the breach or injury suffered.

He concluded that there was no evidence of abuse of judicial discretion in awarding the appellants aggravated damages totaling a block figure of Uganda shillings 1,000,000,000/: (one billion) to be shared equally by the 1,568 plaintiffs resulting in Uganda shillings 637,755/: per person; that therefore, the learned Justices of Appeal properly evaluated the evidence and applied the law and the principles governing the award of aggravated damages.

In the alternative but without prejudice, Counsel submitted that in the event this Court finds the award of Uganda shillings 637,755/= per person being on the lower side, the sums proposed by the Appellant should be ignored and a much lesser sum should be awarded instead.

{6

## Ground 4

Counsel for the Appellant submitted that, in making the award of 1.0% on terminal benefits, the two lower courts failed to take into account the rationale for awarding interest into consideration when awarding a low intcrest ratc, and thus a wrong exercisc of discretion. He argued that the Court of Appeal ought to havc realized that it is only through an award of interest on the money due to an individual that thc notorious adversc cffcct of inflation (on thc Uganda shilling over the years) can be atoned for. He submitted that the exchange rate between the dollar and the Uganda shilling drastically changed from 1998 until 2014 whcn the appellants filed their suit and 2021at the time of filing the appeal.

Counsel submitted that the Court of Appeal also erred in distinguishing the facts in instant casc from those in the authorities of ]. K Patel V Spear Motors Ltd, SCCA No.04 of 1991(where interest on the principal sum was awardcd at30% per annum) and Premchandra Shenoi & Another V Maximov Oleg Petrovich, SCCA No. 09 of 2003 (where interest on the principal sum was awarded at 20% per annum) on the basis that the cited cascs were business or commercial transactions and not empioyment disputes. He contended that the error is particularly fatal when placed before the finding of the court in the case of Ruth Aliu & 136 others V Attorney General, HCCS No. 1100 of 1998 that was cited to the Court of Appcal, that it is "imtnterial wlrctlrcr tlrc money ruas due to ltitrr under n contract express or irnplied or a statute or tdrcther the money uas due to lim for nny other reason in laul' ⁵¹

Counsel subrnittcd that money due to a businessman is affected by thc same inflation as money due to an employcc if either of them is kept out of iU that thc presumption is on thc defendant that has kept the employee or busincssman out of the moncy due and which prcsumption is that he has had use of iti and that the interest imputable by a court of law is in respcct to that dcfendant and not the plaintiff albeit with exercisc of court's discretion in reaching a specific interest

rate. Counsel concluded that thc discretion was erroneously exercised by the Court of Appeal.

In reply, Counsel for thc 1.t Rcspondent submitted that it is within the discretion of court to award interest at a rate that it deems fit. He contended that thc basis for an award of interest is that thc defendant has taken and used the plaintiff's money and benefitted; that consequently, the defendant ought to compensate the plaintiff for the money; and that, clearly interest is awarded at the discretion of court which has to be exercised judicially taking into account the circumstances of a given case. t'inf,

Counsel contended that while scction 26 (2) of the Civil Procedure Act, Cap 77, gives court discretion to award interest adjudged on the principal sum from any period prior to the institution of the suit, or from the date of filing suit to date of decree, or on the aggregate sum adjudged from date of decree to date of paymcnt in full, the burden is on the party claiming interest to plead and adduce some evidence cntitling that party to interest.

Counsel submittcd that the learned Justices of Appeal were alive to the principle for the award of interest and the time/period when interest starts running. Hc argucd that the judgement of the learned Justices of Appeal justified the award of the 10% interest given the fact that these were terminal benefits and not damages as such, and the samc was not

a contract or commercial/business contract cause of action to qualify for an award beyond 10% intcrest; that court also concurred that since the parties had settled the matter of terminal benefits by consent and the issue of interest had bcen referred to court for determination, the trial court was right to grant interest at 10% running from the date of the consent judgement and not when the matter was filed, given the fact the three were bona fide reasons that occasioned the delay in payment of thc terminal bencfits. Counsel further submittcd that the learned Judge was guided by cvidence, which evidcnce was then applied to the proven facts ois-a-ais the established rules and principles of law; and that the same was neither arbitrary, capricious, nor unrestrained. ,6Q/\

Counsel concluded that judicial discretion was not abused, and that the awards on interest was within the provisions and ambits of the law.

In rejoinder, Counsel for the Appellant submitted that the Court of Appeal's distinction in interest awarded on the basis that thc instant case concerned an cmployment relationship, therefore justifying ^a lower interest rate as is usually awarded in commercial arrangements, is a violation of the right to equality provided under article 21, (1), (2) & (3) of the Constitution of the Republic of Uganda. He argued that to uphold the decision of thc Court of Appeal is to enable the

discrimination of the claimants on economic grounds; that furthermore, there was no demonstrably justified basis for the discrimination.

## Ground 5

Counsel for the Appellant submitted that if this Court finds ground ² in favour of the Appellant that terminal benefits are special damages, then interest on special damages must be awarded from the date of loss and not from the date of judgment, be it consent or otherwise. He submitted that, however, in the alternative and without prejudice, should this Court find that terrninal benefits are not special damages, the award of interest on the principal sum, bcing the terminal benefits, should run from the date when the amount claimed was due. He cited the case of j. K Patel V Spear Motors Limited, already cited, to support his submissions, arguing that in the said case, the date of 4tt February ¹⁹⁸⁶was not the date whcn the suit in the said f. K Patel case was filed, but rather, when the parties agreed to the amount payable. l0. A-

Counsel submitted further that the interest of the 1,568 claimants' terminal benefits should run from the date each of them were laid off, because the subsequent Auditor General's report did not change the fact that the terminal benefits were due as at thc date of lay off; that the report also did not change how much was payable to a claimant as at the date of lay off; and that therefore, the delay in coming up with the report does not change the figures payablc.

Counsel prayed that the award of interest on the principal sum/terminal bencfits/special damages ought to have run from the date (or year, for those without specific dates) when each claimant was retrenched, as stated in the verification report, till full payment. He argucd however, that if this Court in its discretion is inclined to provide a uniform cut-off date on which the interest for all the claimants should corunence and in the interest injustice, the cut-off date be the L3th of Novembcr 2009 whcn the Auditor General's report was issued, particularly because nobody contested the report and a consent judgment entered for payment to be made in accordance with it.

Counsel submitted that, on a sccond leg and in the alternative but without prejudice, interest on a liquidatcd amount, to which a claimant is entitled, is awarded from thc date of filing of the suit until payment. He relied on the decision in Mukisa Biscuit Manufacturing Co. Ltd V West End Distributors Ltd (No. 2) [1970] EA 469, whcrc Spry V-P stated the principle that wherc a person is entitled to a liquidated amount and has been deprived of them through the wrongful act of another person, he should be awarded intcrest from the date of filing suit. ,G^

Counsel submitted that it is not in disputc that thc Auditor General's report made the amounts claimed a liquidated amount; that the courts below ought to havc in the very least ordered that intercst on the terminal benefits run from the date of filing the suit, which was 10th February 2015.

In reply, Counsel for the 1't Respondent referred this Court to page 14 of the Court of Appeal judgment (page236 of the record of appeal) and submitted that the learned Justices of Appeal corrcctly held and concurred at thaU

"the supreme Court thus recommend interest at Court rate from the date of special dnmages front the date of interdiction or dismissal till payment in full,' where as I do respectfully abide that position, I fnd that principle of the lau inapplicable to tlis appeal giaen that neither general nor special damages were in issue therein the question of general damages nnd interest applicable thereto ruos settled by the consent judgruent."

,(A Counsel reiterated his submissions on the discretion of court to award interest adjudged on the principal sum under section 26 (2) of the Civil Procedurc Act, but emphasizcd that the burden is on the party claiming interest to plead and adduce some evidence entitling that party to interest. He submitted that thc discretion was exercised judiciously by the first appellate court in awarding interest on the principal sum of 70o/o per annum, and also by a warding intercst on thc principal sum from the date of the consent judgement till payment in full instead of running from the date of retrenchment until payment in full. He relied on the case of Omunyokol V the Attorney General, already cited, which was relied on in Uganda Development Bank V Florence Mufumba, Court of Appeal Civil Appeal No.241 of 2015, where itwas held that interest awarded on special damagcs is awarded from the date of loss, while interest on general damagcs is awarded from the date of judgment.

In rejoinder, it was submitted for the Appellant that it was because of the Court of Appeal's error in treating the terminal benefits as though they were not special damages that the award on interest was ordered to commence from the date of the consent judgment, thus constituting an error in law.

## Ground 1

Counsel for the Appellant submittcd that, as submitted in grounds 2 to 5, there was an outright failure by the Court of Appeal to carry out its duty as a first appellate court of reviewing and re-evaluating the evidence on record, and, as a result of the said failure, it reached thc wrong deductions/conclusions that constituted the grounds of appeal. He contended that this Court, being a second appellate court, is mandated by law to sit as a first appellate court in order to ensurc that justicc is properly and truly servcd. He cited the case of Areet Sam V Uganda, SCCA 2O of 2005 to support his submissions. ,t6

In reply, learned Counsel for the 1't Respondent reiterated his submissions that the learned Justices of Appcal carefully applied sound

legal principles on aggravated damages, interest and the period as to when interest starts running; and that there is no miscarriagc of justice as the evidence on record was wholly and dully evaluated beforc arriving to a decision to dismiss the appeal.

## Resolution of the Appeal

In resolving this appeal, I will address ground 3 first; then grounds 2, 4, and5 together, since they concern the same subject matter of terminal benefits; and finally ground 1.

This Court is alive to its role as a second appellate court, as set out in Kifamunte Henry V Uganda Supreme Court Criminal Appeal No. 10 of 1997, that:-

" on a second appeal, a second appellate court is precluded from questioning the fndings of fact of the trial court, proaided thnt there ruas eaidence to support tlrcse findings, tlrcugh it mny think it possible, or eaen probable, tlwt it toould not lwae itself corue to the sanle conclusiotl, it can only interfere uhere it considers that there Llas no eaidence to support the finding of fact, this being a question of latu."

## Ground 3

r\^f,

The Appellant's grievancc in this ground of appeal is that the learned ]usticcs of Appeal uphcld the decision of thc lcarncd trial Judge, who, even after agreeing that the 1't Respondcnt was callous in the way it delayed to make the payments to the Appellants, the court went ahead

and awarded a sum of Uganda shillings 637,755/: as aggravated damages to each claimant which, in their opinion, was a paltry sum.

The 1't Respondcnt, on the other hand, contends that the learned Justices of Appeal properly evaluated the evidence and applied the law and the principles governing the award of aggravatcd damages; that the learned ]ustices of Appeal alluded to the evidence of the alleged " callous conduct" of Government in delaying to pay the appellants their terminal benefits, which conduct was sufficiently compensated, even though each plaintiff got Uganda shillings 637,755/:; that the quantum awarded in aggravated damages is at thc discretion of the court and has to be exercised judiciously; and that there was no evidence of abuse of judicial discretion in awarding the appellants the aggravated damages in question. t"i,C

In the cited case of Fredrick J. K Zaabwe V Orient Bank & 5 Others, this Court citcd Spry J, VP in Obongo V Kisumu Council 1197'1,)F'A91,, at 96, who, when explaining the thin diffcrencc between exemplary damages and aggravated damages, statcd thc nature of aggravated damages to be those damages where court may takc into account factors such as malice or arrogance on the part of the defendant and the injury suffered by the plaintiff, for examplc, causing him/her humiliation or distrcss; and that damages cnhanced on account of such aggravation are regarded as still bcing essentially compensatory in

nature. In the same case of Fredrick J. K Zaabwe V Orient Bank & 5 Others, the appellant was awarded aggravated damages of Uganda shillings $200,000,000/=$ ;

"*not only for the unwarranted and wrongful deprivation of his property*" but also because of the conduct and apparent arrogance of the respondents."

In the instant appeal, the record shows that, in agreeing with the award for aggravated damages by the learned trial Judge, the learned Justices of Appeal stated in their judgment that:-

"Indeed in his judgment the learned trial judge took cognisance of this when he provided the facts of the case, particularly regarding the *rationale for his award of aggravated damages;* VARA

.......... the conduct of the defendants was extremely callous. That the *Defendant knew that they had an obligation to pay the claimants but despite repeated demands by the plaintiffs the defendant refused to pay* giving flimsy excuses. That in this case, there was oppressive, arbitrary and unconstitutional action by the servants of government for which a penal sanctioned is called for, that this was a case where the plaintiffs *should be awarded a collective enhanced compensatory damages not only* for the unlawful deprivation of the plaintiff entitlements but also for the *arrogance of defendants.* Since the judgment is against Government and the Government has already made concessions involving colossal sums

of money the payment of ruhich will inaolae spending public money, I zuill award aggraaated damages totaling a block figure of UGX 1,000,000,000- (One Billion shillings) only (sic) to be shared equally by the plaintiffi." (underlined for emphasis).

The record of appeal, at pages 339 to 341, shows that the learned trial Judge, in his judgment, heavily condcmned the acts of the 1\* Respondent. In his discretion, hc found the sum of Uganda shillings 1,000,000,000/: (one billion) a sufficient amount to compensate the claimants by way of aggravated damages. He gave reasons for the award, which reasons werc well captured by the first appellate court in its concurring judgment, that hc awarded damages totaling a block figure of collcctive cnhanced compensatory damages since the judgment was against Government which had already made concessions involving colossal sums of money, the payment of which involved spending public money. ,,',"if

In addition, the Court of Appcal correctly apprcciatcd the peculiar circumstances of the case before the learned trial Judge, that the parties had already entered into a consent judgment for general damages, which by their nature, usually take into account aggravating factors like those reflected in the injuries suffcred by the plaintiffs thcn. The Court of Appeal also correctly distinguished the cases relied on by the appellant in the appeal before thcm, that:-

"...t|rc Respondent in tlrc Bank of Uganda os. Betty Tinkamqnyire case lwd been urongly retired, unlike the present claimnnts that were laufully terminated pursunnt to tlrc Public Enterprises Reform and Diuestiture 4ct.......

It tuill suffice to point out that tlrc terminntion of the present claimants uqs due to public policy. Tlrc termination process was not prouen to hnae carried such connotations of degrading and callous treatment f'rom their employer as tlrc respondent in the Betty Tinkamanyire case experienced. The only conduct complained of in the present cose is the reluctance of the Priztatisation Unit and relnted goaerrunent departments to ffict payment of the due terminal benefits, despite their oerification by tlrc offce of tlrc Auditor General. The mqteriol on record suggests that, far from simply declining to effect payment, the claint required intricate attention to aaoid double payment and other accotmtability issues.... lt cannot be postulated, therefore, that the fnancial due diligence that is underscored in the present nppeal denotes the leaels of impunity that were demonstrated by the Central Bank in the Betty Tinkamanyire case. The delay in payment in this case Tuas clearly orclrcstrated by the need to reconcile oarious conflicting fnancial and legal positions. ,,Gf,

Similarly, tlrc appellant in the Fredrick Zaabwe case had been fraudulently and unlatufully depritted of his fnmily residence, rchiclr property u,as also home to the lau frm from tthich lrc deriaed ^a

liaing...such extreme circumstances ruere not established to haae been the case with the present claimants. lndeed, while both the Bethl Tinkamanyire and Fredrick Zaqbwe cases haoe undergone full and protracted trials up to the Supreme Court, effort ruos made to mitigate the aggraaating circumstances of delayed payments in this case with the execution of the Consent Judgment by the First Respondent....

To his credit, the trinl judge did judiciously acknowledge that concession by the First Respondent...."

Thus, based on the concurrent findings of fact by the two lower courts, and the reasons given by the said courts, it is my considered opinion that the lower courts correctly applied the principles to their concurrent findings of fact in arriving at the award of aggravated damages. I would, in that light, have no reason to interfere with the first appellate court's confirmation of the award. ,,\trn--

Thus, I find that the award of Uganda shillings 1,000,000,000/= (one billion) was, in the circumstances of the case, sufficient to compensate the appellants for the delay in payment.

Thus, based on the above reasons, ground 3 of this appeal fails.

## Grounds 2,4 &5

In ground 2, the Appellant's contention is that the Court of Appeal erroneously found that terminal benefits are not special damages. In ground 4, the Appellant challenged the interest rate of 10% per annum

awarded on the terminal benefits, contending that it was low. He sought to be awarded an interest rate between 20-30% per annum. In ground 5, the Appellant's grievance is in respect to the date set by the lower courts as to when the 10% interest on terminal benefits should run.

Regarding the issue raised in ground 2 as to whether the terminal benefits were special damages, the $1^st$ Respondent, in opposition to the Appellant's position, contends that the said terminal benefits cannot legally fall in the category of special damages as the same lacked the evidence attributable to such damages.

In arriving at its decision that terminal benefits are not special damages, the Court of Appeal, at page 14 of its judgement (page 236 of the record MAR of appeal), stated that:-

"... the question of General Damages and the interest applicable thereto was settled by the Consent Judgment. On the other hand, although a claim for special damages was made in the pleadings before the trial *Court, following the consent judgement, that claim was not among the remedies sought by the appellants. It is apparent from the three issues for* the determination at trial that the appellants only sought interest on terminal benefits. Undoubtedly, terminal benefits are not one and the same things as special damages. This is tacitly acknowledged by the appellants themselves in their amended plaint in so far as they

distinguish their claim for tlrc oerified terminol benefits from that in respect of special damages; opting not to pursue the latter after execution of tlrc consent judgement."

The forcgoing extract of the judgment shows that, the Court of Appeal's conclusion that, " terminal benefits are not one and the same things as special damages", was based on their finding or position that, following the consent judgment, the claim of special damages was not among the remedies sought by the appellants. This position suggests that the first appellate court delinked the consent judgment from the pleadings or the dispute. ,r1ll^

In my considercd view, the issue of whether the terminal benefits were claimcd as special damages can only be resolved by looking at the pleadings. It cannot be resolved, like the Court of Appeal did, by looking only at what the appellants sought after the consent judgment was signed, which in this case was interest on the terminal benefits. In simplc words, one cannot award interest in abstract without addressing the nature of the claim on which it is based. Doing so would be treating the issue from a very narrow and restricting perspective, since the decision on the rate of the interest to award would depend on the nature of the claim, that is whethcr it is claimcd as general damages, or special damages, or aggravated damages/ or exemplary damages, etcetera. This is because, in law, for examplc under section 26 of the Civil Procedure Act, Cap 71, different types of damages require different rates of interests, and different dates of commencement, that is, whether they are to run from timc of say, when the cause of action arose/ or from the date of judgment, or of consent, etcetera.

Thus, much as the issue of the terminal benefits had been covered by the consent judgment, the issue of what interest was to be awarded, which was referred for trial by the parties, would not be efficiently resolved without addressing how the terminal bencfits were claimed in thc plcadings.

, ""f In the circumstances of this appeal, the amended plaint shows on page 247 of the record of appeal that thc terrninal benefits of Uganda shillings 10,330,013,506f : were specifically praycd for or claimed as special damages at the High Court, as follows:-

"WHEREFORE the plaintffi pray thnt this honorable court may be pleaded to enter judgment in their fauour against tlrc defendant for:

1) Special damages UGX 10,330,013,506."

Indeed, the Court of Appeal, as reflected in its judgment, cited the above cxtract and acknowledged that thc Appellant made a claim for special damages in the pleadings before the trial Court. Secondly, contrary to the 1't Respondent's submissions, there is nothing in the amended plaint to show that the claim for terminal benefits being special damages was not distinguished at all by the plaintiffs, who were appellants at thc Court of Appeal.

Thus, with due rcspect, having found as a fact, and correctly so, that the appellants madc a claim (a prayer) for special damages in their pleadings, the learned Justices of Appeal, crred when they proceeded to hold that terminal benefits are not onc and the same as spccial damages in this case. The reason the first appellate court based on when refraining from treating the terminal benefits as special damages in the instant situation, that is, that the claim of tcrminal benefits was not among thc remedies sought by the appellants, or that the appellants only sought interest on terminal bcnefits, was, in my considered opinion, for reasons already stated, not grounded in law. The fact that the terminal benefits were consentcd to rather than being specifically proved does not take away the fact that they were claimed, or prayed for, as special damages in the pleadings "?z\

Secondly, the 1't Respondent, in supporting thc decision of the Court of Appeal, appears to suggest in their submissions that since special damages were not specifically pleaded, particularizcd and proved, the courts arc rcalistic and accept that the particularity must be tailored to the facts. With respcct, I would not be persuaded by those submissions together with the cascs that were cited in support, which, in my considcred opinion, would be validly raised or put, and makc perfect sense, only if the matter was being considered at trial, which was not the case in this case where that particular mattcr was settled by consent

of the parties before such trial could take off. There are two reasons for my position.

The first is that, as a matter of fact, in the circumstances of this case, it is very clear from the record at page 330 of the record of appeal that the tcrminal benefits totaling Uganda shillings 10,330,013,506/ -, wh'ch were thc cxact benefits claimed by the appellants in their pleadings, were covered by the consent judgment. The need for specific proof of special damagcs therefore could not arise in this case where special damages werc covered by the conscnt judgment. ,;5|

The second reason is based on what a consent judgment, by its very nature, entails. Black's Law Dictionary, ninth edition, at pages 346 and 918, defines a consent decree (agreed judgment) as a settlement that becomes a court judgment when the judgc sanctions it, that in effect, an agreed judgment is merely a contract acknowledged in open court and ordercd to be recorded, but it binds the parties as fully as other judgments. A consent judgment is therefore a judgment based on an agrcement between the parties to a lawsuit to settle the matter, aimed at ending the litigation with a judgment that is enforceablc.

Thus, in my considered opinion, a consent judgment, by its very nature is not based on any party's fault or blameworthiness, such that it is even possiblc for a party to the suit to compromise his or her position in the interests of putting an end to the dispute or settling the matter

amicably. It is in that respect that I would take it that the faults in the pleadings or weakness of a case should not be relied on to deprive a party of his/her claims covered by a conscnt judgment.

Thus, since consent judgments are an enforceable reflcction of the parties' agreements to settle a dispute with the aim of ending litigation, short of the existencc of vitiating factors like fraud, collusion, mistake, or contravention of court policy, such parties must uphold the consent judgment extracted from their settlement or agreement. It was stated in the case of Attorney General V James Kamoga & Another, Supreme Court Civil Appeal No. 8 of 2004, that a consent judgment once endorsed by the court bccomes a judgment and it is binding on all the parties. To that extent, the parties to the consent are estopped from asserting different positions from the stipulated agreement. 'tlia

Thus, based on the findings above and the reasons given, I would find that there is merit in ground 2 of this appeal.

This takes me to the question of the interest rate of L0% per annum awarded on the terminal benefits which has been challenged by the Appellant as being low, in ground 4.

Section 26 of the Civil Procedure Act, Cap 71. states that awards of interest are at court's discretion. Sub rule (3) of the same section states that:-

"Where such a decree is silent tuith respect to the payment of further interest on the aggregate sum specifed in subsection (2) from the date of the decree to the date of pnyment or other eailier date, tlrc court shall be deemed to lmoe ordered interest at 6 percent per year./'

This indicates that an award of 6% interest would be a legal award. In the instant situation, the claimants were awarded 10% interest on terminal benefits of Uganda shillings 10,330,013,506/- wh'ch is higher than the 6% court rate. ',6

The learned trial Judge found the claim of 25% interest rate to be on the higher side, but he did not give reasons for his finding. On the other hand, the learned Justices of Appeal considered the cases availed by the appellants to support his prayer for an increased interest rate as being business/comrnercial cases as opposed to employment cases.

At the Court of Appeal, the appellants' argument in favour of a higher interest rate was on the basis that the terminal benefits were special damages. The Court of Appeal dcclined to award a higher interest rate, based on its finding that the terminal benefits were not special damages. I have, for reasons given, alrcady made a finding to the contrary that the terminal benefits wcre spccial damages.

I find the decision in the citcd case of Omunyokol Akol Johnson V Attorney General very appropriate to the circumstances of this appeal since the dispute in that case also arose from a dismissal of the appellant, in respect of whom, concerning his claim for special damages, Odoki Ag. JSC, as he then was, stated:-

been muarded on special dama es from tlrc date of interdiction." "lt is uell settled law that the award (ofl interest is in the discretion of court, I think it is also trite lato tlut for special damages the interest is awarded f'rom the date of the loss.... The appellant neaer pleaded or prayed for such a high interest therefore.... The rate 20% should hoae

This then infers that the terminal benefits, having been claimed or prayed for as special damages, would warrant a higher interest rate than that awarded by thc lower courts. In that regard,I would, guided by the principle set out in Omunyokol Akol Johnson V Attorney General, where the facts are materially the samc as those in the instant case, award a higher interest rate of 20% per annum instead of the 10% per annum awarded by the lower courts. ,,il6-

Regarding the question raised in ground 5 of when the interest on terminal benefits should run, the Court of Appeal upheld the trial court's award of intcrest from the date of the consent judgment.

The Appellant made two alternative prayers in his submissions that the award of interest on thc principal sum, being the terminal bcncfits, should run from the date when the amount claimed was due; and, in the alternative, that interest on a liquidated amount, to which ^a

claimant is entitled, be awarded from the date of filing of the suit until payment.

The learned Justiccs of Appeal found that the learned trial fudge exercised his discretion well within the precincts of Section 26 of the Civil Procedure Act in awarding interest on terminal benefits from the date of the consent Judgment. The learned trial Judge in arriving at period of the interest rate, stated in his judgment that:-

"Clearly interest is atuarded at the discretion of court uhich has to be exercised judicially taking into account the circumstances of a giaen case. The argument agninst aruard of interest bases on the nmount the defendant is to pay is untenable because the defendant took a deliberate risk rulrcn it did not cn out its cortstitutional du to tlrc clnimants tlrcir dues in tinrc ruitltout reasonable cnuse. Secondlv brt retoinins tlrc plst!]lffurqtelL the onlu inference is tlmt tlrc defendant lms lnd to use it itsel (underlined for emphasis). A^l^

It is apparent, thereforc, that thc learned trial Judge correctly considered that thcrc was a risk in the defendant not paying the plaintiffs what was due to them in time.

In the cited case of Omunyokol Akol johnson V Attorney General, this Court awarded spccial damages from the date of interdiction or dismissal until payment in full. Thus, as a general principle, interest on special damages is awarded from the date of loss and not from the date of judgment.

This would, in the circumstances of this case, mean that the 1,568 claimants' terminal benefits should ideally run from the date each of them was laid off, because the subsequent Auditor General's report did not change the amount payable to the claimants on being retrenched, or the fact that the terminal benefits were due as at the date of the retrenchment.

The adduced evidence on record, however, shows that, much as the terminal benefits were due to the claimants at the time of termination/retrenchment, a period of 20 years had lapsed before their claims were verified by the Auditor General, which, based on the evidence on record, was due to financial and legal due diligences on the part of Government.

There is further cvidence on record, however, that in 2009 when the Auditor General's report dated 13d' November 2009 was finalized showing the amount due as Uganda shillings 10,330,013,506/:, the same was not paid when it was prcscnted to thc Privatisation Unit. The position then, is that, when the Auditor General's report was issued on 13th November 2009, the amount of terminal benefits due to the claimants was no longer speculative sincc it had been vcrified by the Auditor General. Indccd, the said terminal benefits were claimed or

prayed for as special damages, in the pleadings (the amended plaint) which, as the record shows, was filed in the High Court on l0thFebruary 2075, after the report of the Auditor Gencral which was annexed to the Amended plaint as " CMB2" .

It is my considered opinion, based on the adduced evidence, the applicable laws, and the circumstances of this appeal, that oncc the claim for terminal benefits was verified by the Auditor General and presentcd for payment, there is no bona fde reason on record to justify the Respondents' delay in paying what was due to the claimants. Indeed, as the record shows, it was because of thc further delay of ⁵ years in paying the verified amount of terminal benefits that thc appellants filed the suit at High Court. In that regard, guided by the decision and principle set out in Omunyokol Akol Johnson V Attorney General, already cited, it is only fair and just that the period of intercst on the terminal benefits should have been ordered to run from 13th November 2009 when the claim was verificd by thc Auditor General, and not the date of thc consent judgment. uS(

I would accordingly set aside the order for the interest rate on the terminai benefits running from the date of the consent judgment, with an order that it runs from 13th November 2009, the date the amount due to the appellants as terminal benefits was verified. Thus, based on the reasons given, I find merit in grounds 2, 4 and 5 of this appeal.

## Ground 1

In ground 1, the Appellant faulted the learned Justices of Appeal that they failed to evaluate the evidence on record. This grievance of the Appellant runs throughout all the other grounds of this appeal which I have already resolved and given reasons.

Regarding grounds 2, 4 and 5 of this appeal, which I found had merit, I would hold that the learned Justices of Appeal did not properly evaluate the evidence relating to those grounds. However, regarding ground 3 of the appeal which I found haclno merit, I would hold that the learned ]ustices of Appeal properly evaluated the evidence relating- \q to that ground.

Thus, based on the foregoing, ground 1 of this appeal partially succeeds regarding ground 2,4 and 5 of this appeal, but fails regarding ground J.

All in all, I find this appeal substantially has merit, and it is allowed regarding grounds 2,4 and5; but it fails, and is accordingly dismissed, regarding ground 3. Ground 1 of this appeal partially succeeds as stated above.

I would accordingly, save for the order concerning the quantum of aggravated damages which is hereby upheld, set aside the orders of the Court of Appeal and substitute them with the following orders:-

- 1) The interest rate on the terminal benefits/principal sum/special damages is awarded at 20% per annum to run from 13tr. November 2009 until payment in full. - 2) The 1't Respondent will pay the costs, in this Court and in the courts below.

Dated at Kampala this lqt day of N{<r. f 2022.

Percy Night Tuhaise Justice of the Supreme Court

## THE REPUBLIC OF UGANDA

### IN THE SUPREME COURT OF UGANDA AT KAMPALA

(Coram: Owiny-Dollo, CJ; Opio-Aweri, Mwondha, Tuhaise, & Chibita, JJ. S. C)

### CIVIL APPEAL NO. 16 OF 202 ¹

BASIIMA KABONESA APPELLANT

## VERSUS

1. ATTORNEY GENERAL .....,.. RESPONDENTS

## 2. COFFEE MARKETING BOARD (In Liquidation)

[nn lppeal from the Judgment and decree of the Court of Appeal in Civil Appeal No. 196 of 2018 dated 1Sth April, 2021 (Kiryabwire, JA; Muqenyi,JA & Kasule, Ag. JA)

## IUDGMENT OF ALFONSE C. OWINY \_ DOLLO. CI

I have had the benefit of reading, in draft, the judgment of my learned sister Hon. Lady Justice Percy Night Tuhaise, JSC. I agree with her decision that this Appeal should be allowed for the reasons she has given in her judgment. I also agree with the orders she has proposed.

As the other members of the Coram agree, this Appeal is hereby allowed on the terms as proposed by the learned Lady Justice Percy Night Tuhaise, JSC.

Dated at Kampala this \.1io day of C..--t-2022

ALFONSE C. OWINY \_ DOLLO

CHIEF JUSTICE

\t<.- ^J .^o\"^u-r- clx \r-o ,=i C}A .\^ b \e, Ue,q3 n45\ert"-

l. U\p"\$

\-1 -oS- -

## THE REPURLIC OF UGANDA IN THE SUPREME COURT OF UGANDA **AT KAMPALA**

## (CORAM: OWINY-DOLLO,CJ; OPIO-AWERI, MWONDHA;TUHAISE; CHIBITA, JJSC)

### **CIVIL APPEAL NO. 16 OF 2021**

### **BETWEEN**

<table>

BASIIMA KABONESA ::::::::::::::::::::::::::::::::::::

### **AND**

## 1. ATTORNEY GENERAL 2. COFFEE MARKETING BOARD (In Liquidation):::::RESPONDENTS

{Appeal from the decision of the Court of Appeal at Kampala (Kiryabwire,JA, Mugenyi, JA and Kasule, Ag. JA). Dated 15^th April, 2021 in Civil Appeal No. 196 of 2018.

### **JUDGMENT OF HON. JUSTICE OPIO-AWERI, JSC**

I have had the benefit of reading in draft the Judgment of my learned sister Hon. Justice Percy Night Tuhaise, JSC. I agree with her decision that this Appeal should be allowed for the reasons she has given in her Judgment. I also agree with the Orders she has proposed.

| Dated at Kampala this $\frac{19}{10}$ day of $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ $\frac{19}{10}$ | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------| | | | | | | | | <b>OPIO-AWERI</b> | | | JUSTICE OF THE SUPREME COURT |

### THE REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA AT KAMPALA CORAM: OWINY DOLLO CJ, OPIO AUIERI, MWONDHA, TUHAISE, CHIBITA; JJSC

### CIVIL APPEAL NO. 16 OF 2O2L

### BETWEEN

BASIIMA KABONESA APPELLANT

### VERSUS

ATTORNEY GENERAL

COFFEE MARKETING BOARD (in Liquidation) RESPONDENT

(Appeal from the decision of the Court of Appeal at Kampala before Kiryabwire JA, Mugenyi JA and Kasule Ag. JAI dated 15th April 2O21 in Civil Appeal No. 196 of20L8)

### JUDGMENT OF MWONDHA, JSC

I have had the opportunity of reading in draft the Judgment of my learned sister Hon. Justice Percy Night 'luhaise, JSC. I concur with the reasoning and the decision that this appcal should be allowed. I also concur with the orders proposed and I havc nothing useful to add.

\3\*o day of .2022 Dated at Kampala this

Mwondha

### JUSTICE OF THE SUPREME COURT

# THE REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA

## AT KAMPALA

#### CORAM: OWINY-DOLLO, CJ; OPIO-AWERI; MWONDHA; TUHAISE; CHIBITA; JJ. S. C

## CIVIL APPEAL NO.16 OF 2021

BASIIMA KABONESA ::::::::::::::::::::::::::::::::::::

### **VERSUS**

## ATTORNEY GENERAL COFFEE MARKETING BOARD (In Liquidation) ::::: RESPONDENT

{Appeal from the decision of the Court of Appeal at Kampala (Kiryabwire, JA; Mugenyi, JA and Kasule, Aq. JA) dated 15^th April, 2021 in Civil Appeal No. 196 of 2018

#### JUDGMENT OF CHIBITA, JSC

I have had the benefit of reading in draft the judgment of my learned sister Hon. Justice Percy Night Tuhaise, JSC. I agree with her decision that this appeal should be allowed. I also agree with the orders she has proposed.

Dated at Kampala this.................................... ..........2022

( till

JUSTICE OF THE SUPREME COURT