[2025] UGCA 132

# ⁵ THE REPUBLIC OF UGANDA IN THE COURT APPEAL OF UGANDA AT KAMPALA CIVIL APPEAL NO.286 OF 2O2O

(Coram: Kibeedi, Gashirabake and Asa Mugenlti, JJA)

### RONALD BWAMBALE T/A

#### RONALD BWAMBALE ENTERPRISES: : : : : : : : : : : : : : : : : : :APPELLANT 10

#### VERSUS

# DFCU BANK LIMITED RESPONDENT

(Appeal from the decision of the High Court of Uganda at Kampala (Commercial Division) before Adonyo, J dated 23'd September, 2020 in Civil Suit No. 107 of 2014)

### JUDGMENT OF THE COURT

tll This appeal is against the decision of the High Court (Adonyo, J.) by which the Court awarded the respondent a sum of Ugx. 1,239,811,816/:, determined following a trial by a special referee, as damages for breach of contract bV th2 appellant. n, O'^ b

#### Backgrou nd

)q

l2l The respondent, on l71h February,2014 filed a suit in the High Court claiming a sum of Ugx. 1,125,809,472l: as damages for breach of contract arising from the appellant's alleged failure to pay an outstanding loan advanced by the respondent under a stock financing facility dated 2nd April, 2013 and under ^a separate overdraft facility. The appellant filed a written statement of defence denying the claim.

a

- The trial of the respondent's suit commenced in due course and during the $\mathsf{S}$ $[3]$ hearing conducted on 7^th February, 2016 before Adonyo, J, the High Court, upon the consent of the respondent and the appellant through their respective counsel and in accordance with Sections 26 and 27 of the Judicature Act, Cap. 13 (2000 Edition of the Laws of Uganda), referred the suit to be determined by a special referee to be agreed upon by the parties. In due course, a firm of certified public 10 accountants known as Grant Thornton was selected and was required to determine certain questions contained in terms of reference agreed upon by the appellant and the respondent. - Grant Thornton produced a report dated 24^th May, 2019 in which it $[4]$ determined that the total amount of the outstanding loan owed by the appellant at 15 the time of the filing of the respondent's suit was Ugx. 1,239,811,816/ $=$ . In a ruling dated 23^rd September, 2020, Adonyo, J, the learned trial Judge, adopted Grant Thornton's determination of outstanding liability and entered judgment in the respondent's suit on terms stated in their report, in the process overruling several objections by the appellant to the report. 20

$\cdot$

The appellant was aggrieved by the above-mentioned decision of the learned $[5]$ closs trial Judge and brought this appeal on the following grounds:

- The learned trial Judge erred in law and fact when he entered $(1)$ judgment on an inconclusive, contested and disputed report of factual finding dated August 31, 2020 thus occasioning a *miscarriage of justice.* - The learned trial Judge erred in law and fact when he adopted the $2)$ report of factual findings without taking into account the evidence adduced in court and other relevant facts on record.

- ⁵ 3) The learned trial Judge erred in law and focl when he held that paragraph 2 of poge 5 of the report offactual findings only provided for an opportunity to roise queries and clarificolion in a timely monner and nol o draft report well os not, thus occasioning a miscarriage ofiustice. - 4) The learned trial Judge erred in law and fact when he enlered judgment without giving the appellant a fair hearing on the questions and queries roised in respect of the inconclusive report of factual finding hence faulting the rules of natural justice, - 5) The leorned trial Judge erred in low and facl when he held that the disclaimed report of factual findings was an audit report well as nol." - t6] The appellant prays for the following orders: - "l) The appeal be allowed. - 2) Thejudgment ond orders ofthe High Court be set aside. - 20

3) Costs of this appeal and in the Court below be aworded to the appellant."

l7l The respondent opposed the appeal and prayed that this Court dismisses it with costs. C]rt'>>

# Representation

25 t8l At the hearing before the present panel, Mr. Edward Kakande, Mr. Muhangi George and Mr. Matovu Ronald appeared for the appellant. Mr. Isaac Bakayana appeared for the respondent.

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t9] The Court adopted written submissions filed by the respective counsel as the pafties' written arguments for purposes of this appeal.

#### Analysis

[10] We have carefully considered the submissions by the respective counsel and the law and authorities cited and also studied the record of appeal. We are alive to the provision of Rule 30 (l) (a) of the Rules of this Court which gives this Court powers to reappraise the evidence and make inferences of fact when determining a first appeal. We are also alive to the principle articulated in the Supreme Court decision in Kifamunte Henry vs. Uganda, Criminal Appeal No. l0 of 1997 that a first appellate Court has a duty to review the evidence and all materials before the trial Judge and arrive at its own conclusions while carefully weighing and considering the judgment of the trial Court. We shall apply the above-principles in our ensuing analysis. 10 15

[11] We have found it convenient to consider the arguments on all the grounds of appeal jointly since the points raised in the arguments on the grounds are closely related. ,/. 20

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### Appellant's submissions

# Grounds I,2,3,4 and ⁵

[12] In support of ground 1, counsel for the appellant submitted that the learned trial Judge erred in entering judgment basing on an inconclusive, contested and disputed report. Counsel stated that as soon as the appellant received the impugned report, he, through his counsel, immediately wrote to the trial Court raising several queries about the findings in the report but all the queries were wrongly ignored by

the learned trial Judge. Counsel referred to several questions which were not properly addressed by the impugned report.

[13] Counsel for the appellant further submitted that the leamed trial Judge also erred in adopting Grant Thomton's report which was written as a final report without a prior draft report being shared by the parties for their comments as envisaged under the parties' agreement.

[14] In relation to ground 2, counsel for the appellant submitted that the leamed trial Judge erroneously found that the appellant failed to challenge the impugned report within the 60-day period agreed upon for that purpose and further contended that the evidence showed that the appellant lodged his objections to the report within the envisaged time period. Further, according to counsel, there was evidence that the impugned report was produced outside the 60-day period agreed upon by the parties and was instead produced after almost 120 days, a delay which was caused by the actions ofthe respondent of failing to give the special referee all 7 the necessary cooperation c-A-oL>

[1 5] In his further submissions on ground 2, counsel submitted that Grant Thomton, the alleged special referee did not qualifr as such within the meaning of Section 26 and27 (c) of the Judicature Act, Cap. 13, as found by the leamed trial Judge, for the following reasons: first, according to the agreement of the parties, the alleged special referee was not retained to make an audit report but was instead retained to make a report to help the parties find out what transpired with the accounts involved in the loan transactions to be used in Court and indeed it was stated in the impugned report that it was not an audit; second, the alleged special referee gave no assurance about the quality of the findings in the impugned report; third, the alleged special referee made a disclaimer about the accuracy of the findings in the impugned report. 20 25 30

- ⁵ [16] With respect to ground 3, counsel for the appellant submitted that the leamed trial Judge erred when he found that the parties' agreement did not envisage the production by Grant Thornton ofa draft report before the making ofa final report. Counsel referred to a clause in Grant Thomton's engagement letter which, in their view, gave the parties a right to raise queries on the draft report within 60 days before it could be finalized and submitted that the leamed trial Judge misdirected himself on the significance of that clause. In these circumstances, it was submitted by counsel for the appellant that there was no finalized report which was binding on the parties. - [17] In relation to ground 4, counsel for the appellant submitted that the Intemational Standards on Related Services (ISRS) 4400 which were followed by Grant Thornton in producing the impugned report did not contain guarantees for a conclusive report but rather envisaged the making ofa report which would receive further by its users who would also draw their own conclusions. Counsel referred to commentary on the nature of ISRS standards which states that, "the audilor 15 - simply provides a report of the faclual findings agreed upon procedures, no ossurance is expressed. Instead, users of the rcport assess for lhemselves the procedures andfindings reported by the auditor and draw lheir own conclusionsfrom lhe auditor's work." Cl-D'14 20

[ 18] Counsel submitted that from the nature of the services offered by Grant Thomton, there was need for the trial Court to consider meritorious queries raised by the appellant against the findings in their impugned report, including; first, an objection that the outstanding loan in the impugned report included Ugx. 2,734,6351-- which was overcharged interest; secondly, the fact that the impugned report indicated that the appellant's loan recovery account received cash transfers of Ugx. 5,301,833,422l: which was more than the total disbursed loan of Ugx. 3,837,114,3771: yet the report still indicated that the appellant was indebted to the 25 30

- ⁵ respondent; thirdly, the report did not mention a false claim by the respondent that it advanced an overdraft to the appellant between 18th March, 2013 and 6th June, 2013 during the same period when the stock financing facility was granted to the appellant. - [9] Regarding ground 5, counsel for the appellant submitted that the learned trial Judge erred in relying on the impugned report in disregard of the disclaimer contained in it regarding the accuracy of its findings. Counsel pointed out that the report contained disclaimers on the reliability of the documents which were relied on, and the thoroughness of the inquiry resulting into the report. The report also stated that it was prepared for the purpose of reporting findings for use as evidence in court, and also stated that the authors do not express any assurance about their findings. In counsel's view, the disclaimers rendered the report unreliable and it ,- 10 15 was wrong that it was adopted as a judgment of Court.

[20] Furthermore, in relation to ground 5, counsel submitted that a special referee under Section 27 of the Judicature Act is appointed with expectation of him/her conducting a trial in the traditional sense yet in the present case Grant Thomton, the alleged special referee was unaware of this expectation to conduct a trial. In addition, counsel pointed out that the terms of engagement for the alleged special referee were not endorsed by the trial Court, and neither was the appellant given a fair hearing on the question of whether or not the special referee had properly carried out its duty. Counsel submitted that the alleged special referee in this case was unaware that it was required to conduct a full trial and it would be a breach of the principles ofa fair trial to hold that it was conducting a trial under an order of Court. 20

# s Respondent'ssubmissions

## Grounds 1,2,3,4 and 5

10 1) 20 [21) Counsel for the respondent submitted that one issue arises from the appellant's submissions on all the grounds of appeal, namely: "whether the learned trial Judge erred in law and fact in entering judgment against the appellant (defendant) in terms as proposed in the Grant Thornton audit report of 24'h May,2019." In relation to this issue, counsel submitted that the reference of the dispute between the appellant and the respondent for determination by an auditor was done with the agreement of both parties through their respective and the parties also agreed that the auditor's report would constitute the judgment of court. Counsel submitted, relying on the decision in Behange Jennifer vs. School Outfitters (U) LTD (2000) I EA 20, that under the doctrine of freedom of contract, parties will be held to whatever bargain they reach under their contract. In this case, since the parties agreed to refer their dispute for determination by an auditor, the leamed trial Judge had rightly enforced their bargain by entering judgment based on the auditor's findings.

122) It was further the submission of counsel for the respondent that the appellant does not dispute the amount of Ugx. I ,239,8 I I ,8 l6l= which the auditor determined to be the appellant's outstanding dispute to the respondent. Instead, the appellant merely raises questions to facilitate him in better comprehension of the auditor's a 25 report.

[23] Counsel for the respondent further submitted that, moreover, a report of ^a referee under Section 27 of the Judicature Act, Cap. l3 cannot be probed, corrected or amended by the Court since the parties have already agreed to be bound by whatever finding that is reached by the referee. Counsel referred to the following authorities in support of his submissions on the binding nature of the findings of a

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⁵ referee: Tight Security Ltd vs. Goldstar Insurance Co. Ltd, High Court Civil Suit No. 665 of 2002 (per Kiryabwire, J) and Ken Group of Companies Ltd vs. Standard Chartered Bank (U) Ltd and 2 Other, High Court Civil Suit No. 486 of 2007 (per Madrama, J.)

10 l24l Regarding the questions raised in the appellant's submissions aimed at impugning the auditor's report, counsel submitted that those questions cannot be raised at this point and should have been raised prior to the release ofthe auditor's report.

[25) In light of the above submissions, counsel for the respondent submitted that this Court ought to find that this appeal has no merit and dismiss it.

# 1s Appellant's submissions in rejoinder

[26) In rejoinder, counsel for the appellants submitted that the impugned report was produced outside the parties' agreed time period in that whereas the report ought to have been produced by 2l'1 May, 2017, it was produced on 241h May, 2019 which was over two years later.

²⁰ [27] Furthermore, counsel for the appellants submitted that the impugned report was produced contrary to the parties' expectation that the auditor would first produce a draft report for comments before producing a final report. In this case, , the auditor only produced one final report. 9-A-.^'4

25 [28] Counsel also reiterated the submissions regarding the disclaimers and unanswered questions in the impugned report, and also reiterated the submission that the appointed auditor was not an official referee within the meaning of Section 26,27 and 28 of the Judicature Act.

Decision on Grounds 1,2,3,4 and 5 of the appeal.

⁵ [29] We have carefully considered the rival submissions on the main points arising from grounds 1,2, 3, 4 and 5 of the appeal. We agree with counsel for the respondent that the main question for determination arising from these grounds relates to whether the learned trial Judge erred in adopting the findings contained in the impugned report by Grant Thomton as the judgment of the trial Court. In our view, the different grounds of appeal merely contain different reasons advanced by the appellant in support of answering this question in the affirmative. 10

[30] We have already given the background to the adoption of the impugned report which in summary is that during the hearing of the respondent's suit that took place on 7th February,2016 and with the consent ofthe parties' advocates, the

Court made an order sending the dispute under the suit for trial before a referee in accordance with Section 27 of the Judicature Act. It was envisaged that the parties would agree on terms of reference to guide the trial before the referee and the Court ordered that the parties file those terms of reference in Court by 2l \*' February, 201'1. ln due course, the firm of Grant Thomton, Public Certified Accounts, were appointed and produced a report setting out their findings on the terms of reference including on the question of the amount of the outstanding loan owed by the appellant. We shall describe the nature of the mechanism of trial by ,/ referee later in this judgment 15 20

[31] At this point, we find it necessary to say something about the significance of a report/decision of a referee in a trial by referee. Counsel for the respondent submitted that such decisions are final and binding and cannot be challenged before a court of law. We do not accept this submission. It is our view, that this area of trial by referees operates on similar principles as the field of expert determination as under the English common law whereby parties may by contract agree that any dispute arising under their contract shall be referred to an appointed expert, for determination, who shall produce a decision setting out his/her findings. 30 ⁵ Under the common law, such decisions can be challenged and set aside on grounds of fraud, manifest errors consisting of oversights and blunders so obvious and obviously capable of affecting the determination as to admit of no difference of opinion or failure of the expert to follow the instructions expected to guide his/her determination. See: WH Holding Ltd vs. E2o Stadium LLP 120251 EWHC ¹⁴⁰ (Comm) for a summary of the principles on challenging an expert's decision. 10

l32l Therefore, we emphasize that a decision in a trial by a referee can be challenged on the grounds mentioned earlier or any similar good reason.

[33] Having made the above observations, we shall now move on to describe the mechanisms involving a referee as established under the Judicature Act. We observe that the court is ordinarily the sole decision maker on all matters of law and fact in most cases instituted before it. However, in certain exceptional cases, these decision making powers may be assigned to another person as is the case with referee who is involved in two distinct mechanisms, namely: first, references under Section 26 and secondly, trials under Section 27 . We shall describe these two mechanisms below. 15 20

134) Section 26 provides for the mechanism of making a reference to a relbree and reads as follows: /'

"26. References to referees,

(I) The High Court may, in accordance with rules of court, refer to an of/icial or special referee for inquiry and report any question arising in any cause or molter, other thon in a criminal proceeding.

(2) The report of an official or special referee may be adopted wholly or partly by the High Courl and dso adopted moy be enforced as a judgment or order of the High Court."

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- ⁵ [35] The features of this reference mechanism are therefore as follows: first, the reference is made at the discretion of the High Court, secondly, the reference may be made to an official or special referee, thirdly, the reference entails an inquiry and report on a question or questions arising during the civil proceedings in the High Court, fourth, the report from the inquiry may at the discretion of the High Court be adopted and enforced as a judgment or order ofthe High Court. - 10

[36] The second mechanism involving referees is that of triat by referees as established under Section 27 of the Judicature Act which provides:

"27. Trial by referee or arbilralor.

llhere in ony couse or motler, other than a criminal proceeding-

(a) all the parlies interested who are not under disability consent; 15

> (b) the cause or matter requires any prolonged examination of documenls or any scientific or legal investigotion which cannot, in the opinion of the High Court, conveniently be conducted by the High Court through its ordinory ofJicers; or

(c) the question in dispute consists wholly or partly of accounts, the High Court may, at ony time, order the whole cause or matler or any queslion of fact arising in il to be tried before a special referee or arbitrator agreed lo by the porties or before an official referee or an officer of the High .- Court." dn14 20

[37] The mechanism established by Section 27 envisages a trial by the referee which can be distinguished from the mechanism under Section 26 where the trial is held by the High Court but the referee only determines a particular question referred to him/trer. But with the mechanism of trial by referee, too, the High Court has the discretion on whether to order a trial by referee although such discretion 25

⁵ must be exercised only if the conditions referred to in the provisions of paragraphs (a), (b) and (c) of Section 27 exist.

[38] In our view, the rationale for the existence of the two mechanisms under Sections 26 and 27 respectively is that the relevant parties' dispute engages technical knowledge and the referee is an expert who possesses that knowledge and is better placed than the High Court to determine the dispute or certain questions arising therein. Under the English common law, experts were often engaged to determine disputes relating to technical field like valuation or such similar fields. See for example: Campbell vs. Edwards Il976l t All ER 785, for a case where experts were engaged for valuation of the price ofa property.

- [39] The mechanism under consideration, in the instant case, is that of trial by referee since the parties agreed to refer their dispute to Grant Thomton which published a decision determining the amount of the outstanding loan owed by the appellant. We have already stated that the decision of a referee can be challenged on grounds of fraud, manifest error, failure to follow instructions or a similar good 15 - reason. A good reason may be established where for example the process before the referee lacked the components of a trial since the process provided for in a Section 27 is a trial by referee. 20

[40] In this appeal, the appellant raises other reasons to challenge the referee's decision including: the production of a final report without an initial draft being shared for the parties' comments on its findings; failure of Grant Thomton to give assurance about the findings in the impugned report and instead making several disclaimers about the findings in the impugned report; Iack of conclusiveness of the impugned report, among others. However, as the ensuing discussion will show, the decisive point in this case relates to the failure of the referee to conduct a trial as envisaged under Section 27 of the Judicature Act, which renders it unnecessary 25 30


⁵ to consider the other grounds of challenge to the impugned report that were raised by the appellant.

[41] Regarding the point of failure to conduct a trial, we observe that in the case of Amooti Godfrey Nyakaana vs. National Environment Management Authority and 6 Others, Supreme Court Constitutional Appeal No.05 of 20ll

- (unreported) it was stated that the test for a fair trial is whether the affected person was accorded a reasonable opponunity to be heard or to present his side of the case. From this broad statement, we derive the following components of a trial: first, the presentation of a case, secondly, the taking of evidence, thirdly, the receipt and consideration of arguments or submissions by the parties and fourthly, 10 - the pronouncing of an unequivocal final decision. However, we must add that the components ofa trial before a special referee will inevitably vary from case to case and do not have to be a replica of a court trial. 15

[42) The important factor is whether the aggrieved party was given an opportunity to present his/her side of the story and to rebut any adverse evidence submitted to the special referee. Presentation of one's case or evidence can be by written memorandum unless the applicable law expressly provides for the physical appearance of the parties to present their evidence. With these observations, we shall move on to determine whether the key components of fair trial were present in the process undertaken by Grant Thomton, which culminated in the impugned,,- 2s report. 20 .?4

[43] In relation to the first component of presentation of a case, we observe that in a court system, parties present their cases through pleadings. In this case, terms of reference were presented to Grant Thomton setting out the areas for determination. These terms of reference can be taken as having comprised the ³⁰ parties' cases. However, we noted that the terms of reference did not capture the

defence of frustration of the loan contract that was set out in the appellant's written statement of defence. 5

[44) The particulars of this defence was that the appellant was discharged from further payment of the loan under the stock financing facility because the stocks which formed the collateral for the contract were stolen while under the management of a collateral manager who was controlled by the respondent.

[45] This aspect of the appellant's case was not considered by Grant Thomton and received no attention in its report. We therefore find that an aspect of the appellant's case was not considered by Grant Thomton.

[46] The second component of a fair trial is the taking of reliable evidence. According to the impugned report dated 24rh May, 2019, Grant Thomton, the auditors said that they collected information from the appellant and the respondent and this information can be regarded as the evidence in the case although it is not clear which persons submitted this evidence on behalf of the parties. We also noted that while the auditors indicated in their report that they received information from 15

both parties, there was no indication in the report that the appellant was given a copy of the information submitted to the Auditors by the respondent in order to enable him respond to it, and vice versa. In our view, this was a flaw in the procedure adopted before the auditors. 20

147) As for the nature of the evidence taken by the auditors and finally relied on in their report, the auditors wrote in an excerpt from their report at page 491 of the, record, as follows: cY..^'1t'

> "Our work has been based on informotion provided by the Bank and the Client and has been carried out on lhe assumplion that information provided to us is relioble and in all malerial respecls, accurale and complete. Ile have not subjected the in/ormation provided to independent

## ⁵ verilication or validation or petformed other procedures except to the exlenl oullined in this reporl and annextures herelo."

[48] We take the view that only reliable evidence can form the basis of a decision in a fair trial. This means that in cases involving documentary evidence, only documents that have been verified can form the basis of a decision. In this case, Grant Thomton stated in their report that they did not verifu the documents which they relied on for making their report and in our view this left doubt about the reliability of the evidence which formed the basis of the impugned report.

[49) Regarding the third component of a fair trial which is receipt and consideration ofparties' submissions or arguments, we observe that in a court case, parties are given an opportunity to make arguments about the facts and the law before the court gives its decision. In a trial by referee, a party's arguments may take the form of comments on the referee's initial reports which comments would then be taken into account in making the referee's final report. Indeed, in the case of Tight Security Ltd vs. Goldstar Insurance Co. Ltd, High Court Consolidated Civil Suits Nos. 665 and 667 of 2002, a draft report was produced before the final report and we think such an approach is desirable. In the present case, Grant Thornton made only one report and although the appellant made comments on that report, no further report was given to offer any answer to the . appellant's questions. C}At'> 15 20

[50] We observe that the leamed trial Judge took the view that it was unnecessary for Grant Thomton to make a draft report before a final report, and that if the appellant had any queries he or she should have raised them before Grant Thornton's report was finalized. We are unable to agree with this view. We take the view that it would have been premature had the appellant raised queries before the impugned report was made because since at the time he was unaware of the 30

⁵ reasoning adopted by Grant Thornton in arriving at their decision or whether there were any errors about the reasoning that needed addressing.

[51 ] As for the fourth component of a fair trial which requires the making of an unequivocal decision that fairly reflects the nature of the parties' respective cases, the evidence and their arguments, we find that this component was not satisfied in this case. The impugned report which contained Grant Thomton's findings was far from being an unequivocal decision in that, as stated in the report, it was based on unverified and probably unreliable information which leaves doubt about the accuracy of the findings in the impugned report.

152) Therefore, in light ofthe above discussion, we take the view that the process undertaken by Grant Thomton and which culminated in the impugned report was not a trial by referee within the meaning of Section 27 because it lacked some of the basic components of a fair trial which must be present in such trials. As submitted by counsel for the appellant, it seems to be the case that throughout the process, Grant Thomton were unaware that they were under a duty to conduct a trial at all. Perhaps, it would have been helpful if the Registrar of the trial Court had briefed Grant Thomton about that duty but that did not happen. What resulted, 15 20

in our view, was that the process undertaken by Grant Thomton fell way short of the standard ofa trial expected to be conducted by a referee.

[53] In light of the above reasons, we shall give an affirmative answer to the question of whether the leamed trial Judge erred in adopting the findings contained in the impugned report as the judgment of the trial Court. We find that ground I of the appeal which is closely related to this question succeeds. 25

[54] As for the remedies, arising from our reasons, we find that the process resulting into the impugned repon did not conform with the mechanism of trial by a referee as provided for under Section 27 of the Judicature Act, and therefore the

$\mathsf{S}$ impugned report is set aside and is not binding on the appellant. We order that the matter be returned to the High Court for a new trial of the respondent's suit before another Judge.

[55] We are alive to the fact that an order for a new trial ordinarily nullifies the old trial and everything that arose from it but we consider this to be a unique case where it is justified to retain the reference to a trial by a referee, which was agreed 10 to at the old trial. This is because the agreement to a trial by a special referee was not challenged in this appeal, and we accordingly find no reason to set aside the adoption of a trial by a referee in this case. We therefore find it appropriate to order that the judge at the new trial upholds the agreement to determine the parties' suit in a trial by referee.

[56] However, we urge the judge at the new trial to implement the trial by referee process in accordance with the law which we have endeavoured to explain in this judgment. We would commend the following guidance to be followed in the new trial: 1) appointment of a new audit firm to conduct the trial by a referee; 2) the judge at the new trial should determine the terms of reference to guide the new 20 audit firm in conducting the trial by a referee, and these should make provision for convening a meeting of the parties at which the procedure to guide the trial before the new referees will be determined.

The procedure will describe: $[57]$

clos

$\cdot$

- the timelines for receiving the documents and any other necessary i) information from the parties, - the timelines for the parties to share the documents and any other ii) information submitted to the referee,

$\mathcal{A}$

⁵ iii) the sharing of the preliminary audit report by the audit firm/referee for purposes of enabling each party make its input before coming up with the final report to be submitted to the court.

[58] We also direct that upon receipt of the referee's report, the trial court should take evidence to determine the issue of frustration pleaded by the appellant and its impact on the liability established by the referee.

[59] We also find it necessary to stress that we have endeavoured to describe the essential components of a trial by referee and also give some guidance on the matter because we believe that the use of referees is one of the most appropriate avenues of expediting resolution of commercial disputes, especially those centered around reconciliation of accounts. It is unfortunate that, in the present case, there were serious flaws in the trial conducted before the referee and the report adopted therefrom cannot be left to stand.

[60] The above analysis, which relates to ground 1, is sufficient to dispose of this appeal which we would allow. We do not find it necessary to consider the rest of 20 the grounds 2,,3,4 and 5.

[61] In conclusion, we allow the appeal and make the following orders:

- a) The appeal is allowed. - b) Thejudgment and orders ofthe High Court are set aside. - c) The impugned report by Grant Thomton dated 24'h May,2019 is set aside. - d) The respondent' Civil Suit No. 107 of 2014 shall be retumed to the High Court for a new trial before a new judge. The new trial shall be conducted in accordance with the guidance set out in this judgment.

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e) Each party shall bear its own costs of the appeal since the issues necessitating this appeal arose from the failure of the High Court to offer sufficient guidance for conducting the trial before the referee in this case. However, the costs before the High Court shall abide the outcome of Civil Suit No. 107 of 2014.

We so order. 10

Dated at Kampala this

$12^{\text{th}}$ day of Many 2025.

Muzamiru Mutangula Kibeedi **JUSTICE OF APPEAL**

istopher Gashirabake **JUSTICE OF APPEAL**

Durne

Dr. Asa Mugenyi **JUSTICE OF APPEAL**

$\ddot{\phantom{a}}$

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