[2025] UGCommC 141

#### 5 **THE REPUBLIC OF UGANDA**

# **IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) CIVIL SUIT NO. 981 OF 2023 SSEBULIBA JOSEPH ::::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF**

#### 10 **VERSUS**

# **ABSA BANK UGANDA LIMITED :::::::::::::::::::::::::::::::::::::: DEFENDANT BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

#### **JUDGMENT**

#### Introduction

15 The Plaintiff instituted this suit against the Defendant seeking recovery of money had and received, damages for unjust enrichment, a declaration that the Defendant's employees negligently, fraudulently and wrongfully caused the loss of the Plaintiff's money, a declaration that the Defendant is vicariously liable for the negligent and/or fraudulent acts of its 20 employees, special and general damages, interest at the rate of 24% from the date of the loss until payment in full and costs of the suit.

#### Brief facts

The facts constituting the Plaintiff's claim are that he was employed as a bodyguard at SOC LLC stationed in Baghdad, Iraq, until 2011. Upon 25 completion of his contract, he was entitled to USD 25,000 as compensation for PTSD and depression suffered as a result of his employment in war zones. That an individual, suspected to be an employee of the Defendant or colluding with the Defendant's employees, opened an Account with the Defendant Bank using a copy of the Plaintiff's national identity card. That

- 5 they hacked into the Plaintiff's email and sent the Bank details to the Plaintiff's insurers, who subsequently transferred USD 25,000 to the aforementioned Bank Account, which was then withdrawn by the fraudsters. - The Plaintiff contended that he has never submitted his national identity 10 card and personal details to the Defendant Bank, nor did he operate a Bank Account with the Defendant. That the loss of his money was caused by the negligence and fraudulent conduct of the Defendant's employees.

On the other hand, the Defendant denied the Plaintiff's claims, contending that on 30th October, 2021, a one Ssebuliba Joseph applied to open a Bank 15 Account, accompanied by a national identification card NIN CM81032107Q70L, in the name of Ssebuliba Joseph, along with a passport-size photograph of the said applicant.

That in accordance with its internal policy, the Defendant verified the details of the applicant's National ID using the National Identification 20 Registration Authority (NIRA) portal, which is accessible to it, and confirmed that the applicant's National ID details matched those held in the NIRA portal.

In addition, that the Defendant also compared the details submitted by the applicant against information in the Defendant's customer database,

25 and nothing suspicious came to the Defendant's attention that warranted declining the application to open a personal Account in the name of Ssebuliba Joseph, either in favour of or for the benefit of a stranger like the Plaintiff. That the Defendant opened Bank Account No. 6007225073 in the name of the applicant, Ssebuliba Joseph, and it was made 30 operational.

- 5 That at all times relevant to the opening or operation of Bank Account No. 6007225073, the Defendant was unaware of any of the information alleged by the Plaintiff. That the Defendant's basic duty of care arises from the contract with its customers, and that at all times relevant to the opening and/or operation of Bank Account No. 6007225073, the Defendant owed - 10 no duty of care whatsoever to the Plaintiff, who expressly denied being a customer of the Defendant Bank. Furthermore, that the Defendant did not unjustly benefit or become enriched, as no money whatsoever passed to the Defendant as claimed or at all.

# Representation

15 The Plaintiff was represented by Learned Counsel William Kyobe of **M/s KAL Advocates**, while the Defendant was represented by Learned Counsel Apollo Katumba and Learned Counsel Thomas Oosan of **M/s AF Mpanga Advocates**.

# The Hearing

20 At the hearing, the Plaintiff was a sole witness to his case as **PW1**, and the Defendant called Nakijoba Annet Annita, **DW1**, its former Personal Banker, as the only witness.

The parties filed their respective witness statements, which were admitted as their evidence in chief. In addition, the witnesses were cross-examined 25 and re-examined during the hearing of the case. The Plaintiff and the Defendant also adduced documentary evidence contained in their respective trial bundles.

The parties were directed to file written submissions, but only the Plaintiff complied, and the same have been considered by this Court.

### 5 Issues for Determination

In their Joint Scheduling Memorandum dated 1st March, 2024, the parties raised the following issues for determination by the Court:

- 1. Whether the Defendant is liable for the loss of the Plaintiff's money? - 2. What are the remedies available to the parties? - 10 Issue No. 1: Whether the Defendant is liable for the loss of the Plaintiff's money?

## Plaintiff's submissions

Learned Counsel for the Plaintiff submitted that it was **PW1's** testimony that the Defendant allowed an imposter who fraudulently presented 15 himself to the Defendant as the Plaintiff and conducted transactions with the Defendant that caused financial loss of USD 25,000 to the Plaintiff.

It was also Learned Counsel's submission that the Defendant failed to conduct proper "Know Your Customer" (KYC) checks on the imposter as per the **Financial Institutions Act and the Financial Institutions (Anti-**

20 **Money Laundering) Regulations, 2010**, which, in his view, obligate a Bank to verify a customer's national identification, signature, and/or a biometric data. He submitted that a Bank is required to verify a customer's identity to prevent fraud following the Bank of Uganda Consumer Protection Guidelines, which he stated are similarly stipulated in the 25 Financial Institutions (Customer Due Diligence) Regulations.

Learned Counsel cited the case of *Namayega Barbra Vs Etot Denis & 2 Others Civil Suit No. 939 of 2019*, in which Court distinguished the case

5 of *Mody Nohou Barry Vs United Bank for Africa Civil Suit No. 19 of 2012*, wherein it was held that:

*"As a Financial Institution, the Defendant was, by virtue of Rule 5 of the Financial Institutions (Anti Money Laundering) Regulations, 2020, under an obligation to implement a regime of 'Know Your* 10 *Client' protocols... It turned out that during the KYC process, the relevant officers of the bank never visited the physical address of the company nor that of its Manager. The bank failed to detect the variance in physical location indicated in the business name registration documents and those filled in the account opening* 15 *documents; one in Makerere-Kikoni and the other in Seguku. The address of the beneficiary indicated on the SWIFT transfer was Clement Hill Road in Kampala. The transaction itself was suspicious, considering how soon it occurred after the account was opened and the large sum of money involved. The bank owed the* 20 *Plaintiff a duty of care since the loss suffered was a foreseeable result of the Defendant's want of due care. The Defendant went about the process of opening the account in a reckless manner. Since the Plaintiff's loss was as a result of that conduct, the Defendant was found liable."*

25 Learned Counsel recapped **PW1's** testimony, in which he argued that had the Defendant carefully undertaken the required steps and due diligence by law to verify the impostor's identity, it would have discovered the impersonation and the Plaintiff would not have suffered financial loss. That this outcome would have been possible if the Defendant had 30 implemented proper "Know Your Customer" protocols by reviewing the

5 imposter's photo alongside the signature on the national identity card provided against the one available on the NIRA portal.

It was the submission of Learned Counsel that **PW1's** national identity card, admitted as **PEX 4**, was different from that of the imposter in the Account opening documents and the incomplete phone number used by 10 the impostor, are all inconsistencies that would have been detected by the Defendant, had proper "Know Your Customer" protocols been

Learned Counsel further submitted that **DW1** confirmed in her evidence in chief under paragraph 33 that the money in question was deposited into 15 Bank Account No. 6007225073 at Absa Bank, which the imposter subsequently withdrew from the said Account. That **DW1** also confirmed during cross-examination that the signature on the original ID with the Plaintiff's photo differed from the signature the imposter presented when opening the Bank Account. As evidenced, the signature on **PEX 4**, which 20 is the Plaintiff's ID, and the signature on **DEX 4(C)**, which is the NSIS

form, are similar compared to the signature on **DEX 2**, which is the ID of the imposter, used by the Defendant Bank to open the Bank Account.

Further, Learned Counsel recounted that the Plaintiff testified to Court that he lost a total sum of USD 25,000, which was compensation from his 25 insurer for PTSD and the Defendant's witness **DW1** in her evidence in chief under paragraph 33 confirmed that the money in issue; USD 25,000 was deposited on Bank Account No. 6007225073 in Absa Bank and that it was withdrawn from the said Account.

In line with the above, Learned Counsel submitted that the Defendant, 30 having failed to meet its burden of proof, this issue should be resolved in

implemented.

5 the Plaintiff's favour that the Defendant is indebted to the Plaintiff in the sum of USD 25,000, which is money had and received by the Defendant for the use of the Plaintiff.

In conclusion, Learned Counsel submitted that since the Defendant failed to take proper due diligence, it negligently caused loss to the Plaintiff.

# 10 Analysis and Determination

I have considered the pleadings and evidence on the Court record while resolving this matter. In civil cases, whoever desires any Court to give judgment regarding any legal right or liability must prove the existence of the facts he/she asserts. (See: **Sections 101, 102** and **103 of the**

15 **Evidence Act, Cap. 8)**. The standard of proof is on the balance of probabilities. (See: *Sebuliba Busuulwa Vs Co-operative Bank Ltd [1982] HCB 129*).

As indicated in the plaint, the Plaintiff's claim against the Defendant is for the recovery of money had and received, based on the alleged negligence 20 and fraud of the Defendant and/or its employees, which the Defendant wholly denies. It is therefore imperative to adjudicate the matter in light of the Plaintiff's assertions regarding negligence, fraud, and money had and received.

- i) Whether the Defendant was negligent? - 25 In the case of *Makua Nairuba Mabel Vs Crane Bank Limited HCCS No. 380 of 2009*, **Hellen Obura, J** (as she then was) referred to the **Black's Law Dictionary 8th Edition** at page 1061 to define negligence as: -

5 *"The failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation; any conduct that falls below the legal standard established to protect others against unreasonable risk of harm, except for conduct that is intentionally, wantonly, or willfully disregardful of others' rights.* 10 *The term denotes culpable carelessness." (*See also *Blyth Vs Birmingham Waterworks Company [1856] 11 Ex. Ch. 781).*

Court further stated that a tort grounded in this failure is usually expressed in terms of the following elements: duty, breach of duty, causation and damages and **Hon. Lady Justice Hellen Obura** (as she then 15 was) noted that: -

*"Negligence is a matter of risk-that is to say, of recognizable danger of injury…in most instances, it is caused by heedlessness or inadvertence, by which the negligent party is unaware of the result which may follow from his act. But it may also arise where the* 20 *negligent party has considered the possible consequences carefully, and has exercised his own best judgment. The almost universal use of the phrase 'due care' to describe conduct which is not negligent should not obscure the fact that the essence of negligence is not necessarily the absence of solicitude for those* 25 *who may be adversely affected by one's actions, but is instead behavior which should be recognized as involving unreasonable danger to others."*

The case of *Donoghue Vs Stevenson [1932] AC 562* established three elements in negligence claims that the Court must determine to prove the 30 liability of a Defendant, such as in the present case. These elements include: that the Defendant owed a duty of care to the Plaintiff, the duty 5 of care was breached by the Defendant, and that the Plaintiff suffered injury as a result of the breach.

In his plaint, the Plaintiff set out the following particulars of negligence against the Defendant: opening an Account in the Plaintiff's name without his knowledge or consent; using the Plaintiff's national identification card 10 to open an Account without his knowledge or consent; and failing to observe that the signature of the Plaintiff on his national identity card was different from the one used to open the Account.

In relation to the propositions from the cases cited above, the determination of the Plaintiff's claim against the Defendant in the present 15 case must hinge on the existence and standard of the duty of care, breach, foreseeability, causation and loss. Therefore, it is imperative to determine; whether there was a duty of care between the Plaintiff and the Defendant, whether that said duty of care was breached, what damage was caused by the negligent breach of duty, whether there was any foreseeability of 20 the negligence and whether the damage caused is not too remote, so as to establish whether the Defendant and/or its employees were liable for the loss of the Plaintiff's money amounting to USD 25,000.

It must be noted that the burden of proof rests on the Plaintiff, who must show, on the balance of probabilities, that they were injured by the alleged 25 negligent act or omission for which the Defendant is responsible.

Whether the Defendant owed the Plaintiff a duty of care?

The case of *Donoghue Vs Stevenson (supra*) defined a duty of care as the obligation placed on one to act towards others in a certain way, following certain standards.

- 5 In the present case, the Defendant, being a Bank, primarily owes a duty of care to its customers based on a contractual relationship. (See the cases of *Esso Standard (Uganda) Ltd Vs Uganda Commercial Bank SC Civil Appeal No. 14 of 1992* and *Foley Vs Hill [1848] 2 HLC 28, 9 ER 1002***).** The said contractual relationship is fiduciary, as was observed in the case - 10 of *Excellent Assorted Manufacturers Ltd and Another Vs DFCU Bank Ltd and Another HCCS No. 338 of 2017,* wherein it was held that:

*"The term fiduciary refers to a duty of utmost good faith, trust, confidence and candor owed by a fiduciary to the beneficiary. The bank is the fiduciary and the customer is the beneficiary. It is a* 15 *duty to act with the highest degree of honesty and loyalty toward another person and in the best interest of the other person."*

Therefore, it is evident that such a contractual relationship creates rights and obligations among the parties. In the present case, **PW1** testified that he has never held an Account with the Defendant, but the Bank used his 20 national identity card to open an Account, which resulted in the loss of his money. **DW1** also confirmed that the Plaintiff held no Account with the Defendant. The testimonies indicate that the Plaintiff had no contractual relationship with the Defendant, which ordinarily limits the duty owed to him.

25 However, the case of *Donoghue Vs Stevenson (supra)* established the neighbour principle to the effect that a duty of care arises, where there is sufficient *'proximity'* of relationship between the parties and a *'foreseeability'* of damage. Since the Plaintiff is not a customer of the Defendant, no duty of care was owed to it on proximity; however, 30 consideration is to be made as to whether there was a duty owed to the Plaintiff based on the neighbour principle premised on foreseeability.

5 Therefore, based on the above principle, the duty of care of a Bank can extend to third parties, where the Bank's acts are negligent, fraudulent or against the law and are injurious to a third party.

In the instant case, the Plaintiff alleges that the Defendant, failed to conduct proper "Know Your Customer" (KYC) checks on the imposter 10 contrary to the **Financial Institutions Act, Cap. 57** and **Regulations 5 and 6 of the Financial Institutions (Anti-Money Laundering) Regulations, 2010** that require a Bank to verify a customer's national identification, signature and biometric data.

Considering the above, I find that the Defendant owed the Plaintiff a duty 15 of care.

## Whether the above duty of care was breached?

It is trite that a Defendant will be in breach of the duty of care where he/she fails to take reasonable care to prevent the sort of harm that is contemplated within the duty that he/she owes. The standard of care is

20 premised on the test of a reasonable man. The test addresses what a reasonable man would have done in the given situation. (See: *Blyth Vs*

## *Birmingham Waterworks Company (supra).*

In banking practice, the standard of care expected of Banks like the Defendant, is couched in statute and common law, with a requirement of 25 "Know Your Customer" (KYC), which is an expectation of the Bank to exercise reasonable care when processing payment instructions such as in the case of *Barclays Bank Plc Vs Quincecare Ltd [1992] 4 All ER 363,* or generally ensuring that they deal within the mandate of the customer as per contract or ensure that they identify the customer before 30 them when opening Accounts.

5 Though, in the case of *Bodenham Vs Hoskyns [1852] 42 ER 1125,* **Kindersley V-C** stated that:

*"…the banker looks only to the customer, in respect of the account opened in that customer's name, and whatever cheques that customer chooses to draw, the banker is to honour. He is not to* 10 *inquire for what purpose the customer opened the account; he is not to inquire what the monies are that are paid into that account, and he is not to inquire for what purpose monies are drawn out of that account: that is the plain general rule, as between banker and customer."*

## 15 The objectives of the **Bank of Uganda Financial Consumer Protection Guidelines, 2011** are to;

- *(a) promote fair and equitable financial services practices by setting minimum standards for financial services providers in dealing with consumers;* - 20 *(b) increase transparency in order to inform and empower consumers of financial services;* - *(c) foster confidence in the financial services sector; and* - *(d) provide efficient and effective mechanisms for handling consumer complaints relating to the provision of financial products and* 25 *services.*

The standard of care as per **Musa Ssekaana, J** (as he then was) in the case of *Mugisha Felix & 2 Others Vs Attorney General HCCS No. 237 of 2019* is that:

*"The standard is reasonableness. But in considering what a* 30 *reasonable man would realize or do in a particular situation, we*

- 5 *must have regard to human nature as we know it, and if one thinks that in a particular situation the great majority would have behaved in one way, it would not be right to say that a reasonable man would or should have behaved in a different way. A reasonable man does not mean a paragon of circumspection. The* 10 *duty being a general duty to use reasonable care, reasonableness is the test of the steps to be taken. The standard of care expected is that a reasonable person proving breach of a duty is usually achieved by adducing evidence of unreasonable conduct in light of foreseeable risks."* **(Emphasis mine).** - 15 In the instant case, the Plaintiff alleges that the Defendant fell short of the standard of care expected of it when it opened Account No. 6007225073 in the name of a one Ssebuliba Joseph, similar to the Plaintiff's name without his knowledge or consent; using the identification card of the Plaintiff without his knowledge or consent and failed to observe that the 20 signature of the Plaintiff on his national identity card differed from the one used to open the Account.

**PW1** testified that the Bank was negligent because the photo and signature on his national identity card, which he submitted in evidence as **PEX 4**, differed from those on the national identity card **DEX 2**, which the 25 Bank relied on to open an Account used by the imposter, resulting in the Plaintiff's loss of USD 25,000. **PW1** further stated that the signature on the application form **DEX 4**, which the Defendant relied on to open the disputed Account, differed from his signature.

**PW1** further testified that the signature on the biodata form **DEX 4** was 30 similar to his, and the Account was opened with his documents without his consent. He further testified that the above inconsistencies would have

5 been detected had proper "Know Your Customer" protocols been implemented by the Defendant.

In reply, **DW1** testified that on 30th October, 2021, a one Ssebuliba Joseph presented an application to open a personal Bank Account, as per **DEX 1**, accompanied by his national identification card, **DEX 2**.

- 10 That she compared the passport-size photo presented with the picture on the National ID (**DEX 2**), and they matched. She also stated that after using the portal (**DEX 3)** availed to her by NIRA to verify the details of the National ID presented by the applicant, the details matched. **DW1** further testified that she used the customer database of the Defendant and - 15 checked the details submitted by the applicant Ssebuliba Joseph and they did not have any customer or Account holder named or going by the name of Ssebuliba Joseph which they based on to open Bank Account No. 6007225073 in the name of the applicant, Ssebuliba Joseph and it was made operational, and the customer operated it. She also testified that 20 Ssebuliba Joseph's details on **DEX 2** matched those on the biodata form - **DEX 4**, which they obtained from NIRA.

I have perused the copies of the national identity cards **PEX 4** and **DEX 2** as presented by both parties, the details regarding the name, date of birth, home location, and expiry date are all the same. **DW1** testified that **DEX** 25 **2** was verified by NIRA, through the portal and also the biodata form. The verification was not challenged by the Plaintiff, but he only insisted that his details were used to open the Account that caused the loss.

**Section 69 of the Registration of Persons Act, Cap. 332**, which provides for the national identification card, states that:

- 5 *(1) The Authority shall issue to every citizen allocated a unique national identification number, a national identification card.* - *(2) A national identification card is prima facie proof of the particulars contained in it.*

The Plaintiff contended that the Ssebuliba Joseph, who opened the 10 impugned Account at the Defendant Bank, used his national identity card to open the impugned Account without the Plaintiff's permission.

In the foregoing, it is undisputed that the Defendant verified the national identity card with the issuing body, which validated it. However, the Plaintiff did not present any evidence of verification of his national

15 identification document for the Court to be persuaded that his national identity card, **PEX 4**, is authentic and validated. Even though the variances in the photos and signatures between **PEX 4** and **DEX 2** exist, as also confirmed by **DW1**, the Plaintiff did not fully discharge his burden to prove to the Court that he was the rightful owner of **PEX 4** and that it 20 was the authentic one, and not **DEX 2.**

Regarding the differing signatures, which **PW1** explained, he did not present any additional supporting evidence, such as evidence from a handwriting expert, to verify which of the signatures on **PEX 4** and **DEX 2** is accurate, as he alleged that his documents were used. This was even 25 more relevant considering that he testified that he had used two signatures interchangeably.

As to whether the Defendant's verification was sufficient, **DW1** testified that when she entered the national identification number of **DEX 2**, it returned the name, location, and other contents, apart from the photo and 30 signature. This is also my observation when I perused the bio data form **DEX 4**, which does not bear a photo but only the other details, such as

5 name and signature, which in the circumstances at hand are also not conclusive.

In my considered view, the verification fell short because the Defendant only verified some of the contents of the national identification card.

- In conclusion, it is questionable whether **DEX 2** is authentic because no 10 evidence was presented to show that it was verified in its entirety, including the photo. Moreover, if the Defendant had verified **DEX 2** fully, NIRA would have possibly flagged other IDs with similar names, if any existed. - Therefore, the Defendant breached a duty of care when it failed to verify 15 with NIRA the photo and signature on **DEX 2** of its customer, Ssebuliba Joseph.

## Whether the breach caused any damage to the Plaintiff?

It is important to set out the damage, injury or harm pleaded by the Plaintiff. The very first question to consider is whether the Plaintiff has 20 suffered before a determination of the causation can be made in relation to any breach.

**PW1** pleaded that he was entitled to USD 25,000 after completion of his contract as a bodyguard at SOC LLC. That in the course of his communication on email with his lawyers of Jo Ann Hoffman & Associates, 25 they requested for his Bank Account details where his compensation was to be deposited, which he sent as: Account Number: 2291452029, Account Name: Ssebuliba Joseph, Bank: KCB Bank. Further, that as he was waiting on his lawyers to send a test wire and a settlement agreement in fulfilment of payment of his compensation. The Plaintiff further testified 30 that he contacted his lawyers however, his emails could not be sent as his - 5 email [jssebuliba954@gmail.com](mailto:jssebuliba954@gmail.com) had been hacked. **PW1** testified that when he got another email address, [ssebulibaj438@gmail.com,](mailto:ssebulibaj438@gmail.com) his lawyer, Christopher A. O'Brien, informed him that his previous email had been hacked, his passport accessed, and that the hacker was able to open up a Bank Account Number 6007225073 in the Defendant Bank where the said - 10 money was deposited/sent, and was withdrawn.

withdrawn by the person who opened the Account.

**PW1** alleged that it was the negligence and fraud of the Defendant and its employees who led to the loss of his money amounting to USD 25,000 because they were negligent when the Account was being created, as the impostor who created the Account impersonated him using his national 15 identity card **PEX 4**. **DW1** testified that the money was banked and

It is imperative to ascertain whether the damage was caused by the Defendant and/or its employees, and whether it was foreseeable, considering that the Defendant did not fully verify the photo and signature

20 on **DEX 2**. The lack of verification of the photo and signature on **DEX 2** during the Account creation did not render the claim of the Plaintiff foreseeable. This is because the Plaintiff testified that it is only him, his lawyers and the insurance Company who knew of his impending receipt of USD 25,000. The Plaintiff did not provide any evidence to show that the 25 Defendant or its employees knew of his impending compensation.

This was confirmed by **DW1** who testified that the Defendant did not know the Plaintiff. Further, the Plaintiff did not testify as to who hacked his email or lead any supporting evidence regarding that assertion. In addition, I noted that in the case that the Plaintiff reported to Police **PEX 6**, it simply 30 reflected the suspect/accused as unknown and not the Defendant.

- 5 **PW1** testified that he was the one keeping safe custody of his national identification card **PEX 4**, and he did not provide any evidence that it was ever stolen or that the Defendant or its employees had a copy of the same prior to the opening of the impugned Account. - Therefore, in my view, even if the Defendant did not fully verify the photo 10 and signature on **DEX 2**, there was no foreseeability or causation to the loss of the money. The Plaintiff failed to discharge the burden of proving the Defendant's participation. The damage that the Plaintiff experienced was not foreseeable in my considered view.

In the case of *Donoghue Vs Stevenson (supra),* it was stated that:

- 15 *"The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer's question, who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who,* 20 *then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question."* - 25 In the case of *Apwoyorwot Promise Clare Vs Attorney General & Another HCCS No. 21 of 2020,* **Hon. Justice George Okello** emphasized that to establish negligence, there is a need to establish causation. He posited that:

"*The test of causation is whether the Plaintiff would have suffered* 30 *harm if the Defendant had not been negligent. If it be found that*

5 *the Plaintiff would still have suffered harm notwithstanding that the Defendant was negligent, it can be concluded that the Defendant's negligence was not a 'but for' cause of the harm suffered by the Plaintiff. The burden of proof in respect of 'but for' causation is on the Plaintiff alleging negligence which is to be* 10 *discharged on a balance of probabilities." (***Emphasis mine***).*

In the instant case, the Plaintiff attributed his loss to the Defendant and/or its employees, contending that they were negligent in the creation of the Account by not conducting proper "Know Your Customer" on their client Ssebuliba Joseph, who allegedly used the Plaintiff's documents.

15 Whereas the Plaintiff insisted on the above loss, as observed above, he failed to discharge his burden of proof. **Section 50 of the Registration of Persons Act,** provides for certification of entries and it stipulates that;

*"(1) Upon payment of the prescribed fee by the applicant, the Authority shall furnish a certified copy of any entry in the register* 20 *or return in its custody or a certified copy of any extract from that entry.*

*(2) The copy of any entry in the register or return, or a copy of any extract from the entry, which is certified under the hand of the authorised staff of the Authority to be a correct copy, shall be prima* 25 *facie evidence in all Court proceedings of the facts contained in the copy." (***Emphasis mine)**

In conclusion, whereas the Defendant was negligent by failing to verify the photo and signature on **DEX 2** presented by its customer Ssebuliba Joseph before opening an Account for him, there is no causation between 30 that negligence and the Plaintiff's loss of USD 25,000.

5 The Plaintiff, therefore, failed to discharge his burden of proving any such attribution of mistaken identity or false use of his documents, **PEX 4**.

Therefore, I do not find the Defendant's negligence to have caused any damage to the Plaintiff.

ii) Whether the Defendant or its employees were fraudulent?

## 10 In the case of *Frederick J. K Zaabwe Vs Orient Bank Ltd & 5 Others SC Civil Appeal No. 04 of 2006,* while relying on the **Black's Law Dictionary 6th Edition page 660**, fraud was defined as:

*"An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing* 15 *belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which deceives and is intended to deceive another so that he shall act upon it to his legal injury."*

- 20 It is trite that the particulars of fraud must be specifically pleaded, and it is generally accepted that fraud must be proved strictly, the burden being heavier than that on a balance of probabilities as applied in civil matters. (See: *Kampala Bottlers Ltd Vs Damanico (U) Ltd SCCA No. 22 of 1992***).** - The Plaintiff pleaded the particulars of fraud contending that the 25 Defendant was fraudulent in opening up an Account in the name of the Plaintiff without his knowledge or consent; using the Plaintiff's identity card to open an Account without his knowledge or consent and failing to observe that the signature of the Plaintiff on his national identity card was different from the one used to open an Account.

5 On the other hand, the Defendant denied the Plaintiff's claim, contending that at all times material to the opening or operation of the Bank Account No. 6007225073, the Defendant was unaware of the existence of the Plaintiff and/or any of the information alleged by the Plaintiff in his plaint.

Turning to the present case, **PW1** testified that the information regarding 10 his compensation was known to his lawyers, the insurer, and himself, and that he was responsible for the safe custody of his national identification card.

**PW1** also testified that his national identity card**, PEX 4,** was used by the impostor to open the impugned Account. On the other hand, **DW1** testified

15 that at all times material to the opening or operation of Bank Account No. 6007225073, the Defendant verified the national identity card submitted by Ssebuliba Joseph.

As stated already, fraud is the intentional perversion of truth; however, in the present facts, the Plaintiff did not provide any supporting evidence to

20 prove that his national identity card **PEX 4** had been verified/certified by NIRA.

**Section 69(2) of the Registration of Persons Act**, which provides for the National Identification Card, states that the national identification card is prima facie proof of the particulars contained in it.

25 Further, **Section 50(2) of the Registration of Persons Act,** provides that *the copy of any entry in the Register or return, or a copy of any extract from the entry, which is certified under the hand of the authorized staff of the Authority to be a correct copy, shall be prima facie evidence in all court proceedings of the facts contained in the copy.* (**Emphasis mine)**

5 As earlier observed, the Plaintiff's claims and facts regarding the disparities in **PEX 4** and **DEX 2** were not verified and certified by the issuing authority as per **Section 50(2) of the Registration of Persons Act**, for the Court to establish the truth of **PEX 4** against **DEX 2.**

Moreover, evidence was also presented to show that the Defendant did not 10 know the Plaintiff at all. **DW1** testified that the Defendant was unaware of the impending compensation for the Plaintiff, which the Plaintiff also testified was information only shared with his lawyers and the insurer.

The failure of the Plaintiff to impute or show that the Defendant or its employees had any knowledge of his impending compensation or the 15 storage of his national identity card negates the requirement of "intentional perversion" of the truth. This means that the Defendant's inability to know the truth about the Plaintiff's claim shows that there was no intentional perversion of the truth.

Therefore, fraud cannot arise in the absence of knowledge of facts and 20 truth.

I therefore find that the Plaintiff has failed to meet the burden, and standard of proof required regarding fraud and as a result the Defendant or its employees were not fraudulent given the facts of this case.

## iii) Whether the Plaintiff can recover USD 25,000 as money had and 25 received by the Defendant for the use of the Plaintiff?

Learned Counsel for the Plaintiff quoted the case of *Gloria Kubajo and Another Vs Francis Drate Civil Suit No. 889 of 2020,* where it was stated that a suit for money had and received is based upon an implied promise which the law creates to restore money which the Defendant in 30 equity and good conscience should not retain and that the law implies the

5 promise from the receipt of the money, to prevent unjust enrichment and the measure of the liability is the amount received.

To that, Learned Counsel recounted that the Plaintiff testified in Court that he lost a total sum of USD 25,000, which was compensation from his insurer for PTSD and the Defendant's witness **DW1** in her evidence in chief

10 under paragraph 33 confirmed that the money in issue, was deposited on Bank Account No. 6007225073 in Absa Bank and that it was withdrawn from the said Account.

In line with the above, Learned Counsel submitted that the Defendant, having failed to meet its burden of proof, then this issue should be resolved 15 in the Plaintiff's favour that the Defendant is indebted to the Plaintiff in

the sum of USD 25,000, which is money had and received by the Defendant for the use of the Plaintiff.

In the case of *Gloria Kubajo and Oloye Venance Kolley Vs Francis Drate (supra)*, **Hon. Justice Stephen Mubiru** established elements 20 necessary for a successful "money had and received" claim, which include: the Defendant having or having had possession of the money and that the money belongs to the Plaintiff. The Hon. Judge further indicated that the Plaintiff must prove that the Defendant received money intended for the benefit of the Plaintiff, that the money was not utilized for the Plaintiff's 25 benefit, and that the Defendant has not returned the money to the Plaintiff.

The Learned Judge further held that the burden of proving that equity and good conscience do not demand a refund devolves upon the Defendant who offers such a defence to the claim of the creditor. That it is settled law that once the Plaintiff makes out a prima facie case in his favour, the

5 evidential burden shifts to the Defendant to controvert the Plaintiff's prima facie case; otherwise, judgment must be entered in favour of the Plaintiff. Considering the lack of verification of the Plaintiff's identification, this Court is unable to ascertain whether he is the actual owner of the 10 documents and the money alleged to have been lost.

Having found that the Defendant or its employees were neither negligent nor fraudulent, then the Plaintiff cannot seek to recover the money from the Defendant. It is also pertinent to note that the Defendant did not benefit from the money considering that the same was withdrawn from the

15 impugned Account.

Accordingly, I find that the Plaintiff has not made out a prima facie case in his favour. Hence, the Defendant is not liable for the loss of the Plaintiff's money.

Issue No.1, therefore, is answered in the negative.

20 Issue No.2: What are the remedies available to the parties?

Having found no merit in issue No. 1, the remedies sought by the Plaintiff are hereby denied.

Accordingly, this suit is dismissed. Each party shall bear its own costs.

I so order.

25 Dated, signed and delivered electronically via ECCMIS this **5th** day of **June**, **2025.**

Patience T. E. Rubagumya **JUDGE** 30 5/06/2025