[2000] UGHC 64

## THE REPUBLIC OF UGANDA

## IN THE HIGH COURT OF UGANDA AT KAMPALA

## CIVIL SUIT NO.1050 OF 1998

RESTETUTA TWINOMUGISHA PLAINTIFF

- versus *-*

UGANDA ALUMINIUM LTD. DEFENDANT

BEFORE:- HON. THE PRINCIPAL JUDGE - MR. JUSTICE J. H. NTABGOBA

## JUDGMENT

Restituta Twinomugisha(hereinafter to be referred to as the plaintiff) brought action against Uganda Aluminium Ltd,(hereinafter to be referred to as the defendant). The plaintiff seeks judgment against the defendant for:-

- (a) General damages. - (b) Exemplary and/or punitive damages. - (c) Costs - (d) Interest on the decretal sum

The cause of action seems to be contained in paragraph 11 of the plaint which avers that:-

"11. The plaintiff has had her constitutional rights curtailed and/or interfered with and has been exposed to public humiliation, odium and contempt by defendant's false and malicious report /to the Police/ and she has suffered loss and damage and much anguish and distress".

The facts of the case, which do not seem to be contested by TO either side, are that the plaintiff's late husband, Tony Twinomugisha was employed by the defendant as Chief Accauntant

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prior to his death. I will hereinafter refer to him as the deceased. He had opened a bank account jointly to be in the name of his wife and his. He was obtaining goods from the defendant and, apparently, without the knowledge of the plaintiff he was paying for those goods by issuing cheques drawn on the joint account. He had asked the plaintiff to sign several blank cheques. Whenever he wanted to pay for the goods he would ask the defendant's Cashier, Ms. Florence Tiko to fill in the blanks of the relevant cheques. witness DW5 and testified that her duties as a Cashier was receiving and banking Cash and Cheques and maintaining Customers 'ledge accounts'. The deceased was her boss. He used to bring cheques signed by the plaintiff and instruct Ms. Tiko to fill in the details that he would give her, including the amount of money and the date. She filled in three cheques of shs.4,000,000/= (Cheque No. 075359 which was exhibited in Court as D5), of shs.4,000,000/= (Cheque No. 075558 exhibited as D5 and cheque No. 075544 for She testified that these cheques were issued With regard to the after deceased had died. Tiko was shs.6,000,000/=. in respect of goods taken by Tyresland. cheque for shs. 4,000,000/= (Ex D.5) she dated it 5/9/97 He died on 2/7/97-

After the deceased's demise, Ms. Tiko opened the deceased "desk drawer in his Office (i.e. deceased's Office) in the presence of other Staff members and found several documents,

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including several cheques which bore the signature of the plaintiff as aforementioned.

Most cheques were dated by her after the deceased's death and presented to the bank for payment. Those and some which had been credited on the ledge account of Tyresland were dishonoured and the debit on that account grew to shs.40,831,849/=. $\zeta$ But because some of the old cheques could not be recovered, the debit balance in the account showed a sum of shs.30,631,849/=.

Mr. A. M-Jha the Executive Director of the defendant testified that when the deceased died he was in India and on return he was informed that the deceased had misappropriated a sum of shs. $47,731,000/$ =. It is then that he started demanding /O from the plaintiff payment of the money. He reported the plaintiff to the Police and the plaintiff was charged with the offence of issuing false cheques because she was the signatory to the dishonoured cheques contrary to $S.364(1)(b)$ of the Penal Code Act. She was released on Police Bond but kept 15 on reporting to the Police subsequent to her release.

While the plaintiff was charged with the offence in September 1997, in October 1997, the plaintiff received a . letter from the defendant's lawyers, M/S. Mulenga & Kalemera Advocates informing her that goods purchased by her Company from the defendant had not been paid for "as a result of the fraudulent concealment of your Company's indebtedness by your 20 late husband Mr. Tony Twinomugisha who was also our client's Chief Accountant--".

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The advocate's letter continues:-

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ⁱ-o **81** "Our client further discovered ^a series of cheques issued by your Company in purported settlement of / your dues which had been receipted but were never 5 banked and instead were kept aside by your late husband. When our client discovered and presented them for payment they were all dishonoured. According to our instructions you were the signatory to all the Cheques. Upon full investigation our client found that your Company was indebted in the sum of shs.40,631,849/= and demanded repayment of the same. On 18th August, 1997 the Administrator of the estate of your late husband paid to our client U. Shs.10,000,000/=. To date, however, the outstanding balance of shs.30,631,849/= remains unpaid despite several reminders and demands by our client".

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The advocates' letter warned the plaintiff that unless within 7 days she paid the debt together their legal fees she goods by false pretences. would be reported to the Police for having issued a bouncing cheques and for conspiracy to defraud and/or theft/obtaining

The plaintiff, in her plaint complains of harassment and inti mi dation which were calculated to extort from her the amount of indebtedness. She denies having had a Company that obtained The goods from the defendant she must be right actually. defendant, during the trial could not identify Tyresland nor that ZidT" Some of the tax invoices/ it at all belonged to the plaintiff. receipts pleaded by the defendant indicate that the goods were "Tyresland" while others showed that the supply was supplied to made to Tyresland Ltd.

The Executive Director of the defendant said that there was no such Company or business name. He claims that the goods were supplied to a shop which he claims belonged to the plaintiff. But he concedes that the goods were supplied on the orders of the deceased. The plaintiff denies having operated a shop or Tyresland Company. She claims she was a Teacher of a School.

The question which has been glossed<br>over by both Counsel $10$ is as to how the plaintiff could have signed a Cheque or Cheques for payment of goods supplied to a Company that was not in existence. But Dr. Byamugisha for the plaintiff touched this issue when he cited the provisions of the Bills of Exchange Act.

With the above facts it is now possible to consider the $\iota$ issues framed for determination, which are:-

- (1) Whether the facts quoted in paragraph 8 of the plaint are correct. - (2) If they are correct whether they justified defendant's conduct of reporting the plaintiff to the Police. - (3) Whether the defendant conducted a Campaign and crusade against the plaintiff for purposes stated in paragraph 9 of the plaint. - (4) Whether the defendant's actions or conduct have caused $\infty$ loss or damage to the plaintiff.

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(5) Whether the plaintiff purchased any goods from the defendant.

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- (6) Whether the plaintiff issued the cheques to the defendant in payment for the goods. - (7) Whether the plaintiff owes the sums claimed in the Counter-claim to the defendanto

The facts of the case as outlined above, I think it is , convenient to start with the fifth issue, and follow it with the Sixth issue before reverting to the rest of the issues.

I am about to give. In the first place, the plaintiff testified that she had a joint account with her husband, that she did not know how much money was on the account; that her husband made /Z> her sign blank Cheques and, I think, by implication, that she did not know for what purpose the husband was to use the cheques. She said she was a teacher by profession; that she did not own a company nor did she know Tyresland, the Company alleged to existed. She could not issue a cheque to purchase goods when she did not know that the goods were purchased with the blank She was not challenged at all in I find that she did not purchase any goods from the defendant. In any case such The fifth issue, whether the plaintiff purchased any goods from the defendant, is answered in the negative for the reasons have purchased the goods from the defendant. company did not exist. Therefore she cannot be said to have issued cheques to purchase goods or indeed to purchase goods in **the** name of " / a company she did not know, and a company that never cheques she had signed. her cross-examination about her denials.

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Purchase of goods from the defendant by her late husband cannot be said to be purchase of those goods by her. That the goods were purchased by the deceased is evidenced by the part-payment of shs.'10,000,000/= for those goods by the administrator of the deceased's estate, Mr. Bishagenda. *<<*

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I now pass on to the Sixth issue which is whether the The laintiff never / bla: eques. company which was, in any case, not the owner of the bank account upon which the cheques were to be drawn. It is at this stage that I should refer to the provisions of 73 of the Bills of Exchange cited by Dr. Byamugisha. ZJ" plaintiff issued cheques to the defendant to pay for the goods. I think the argument in favour of the holding for the fifth issue suffice for this issue as well, issued - -Cheques to anyone. She simply signed */^q* The goods were purchased by a non-existing

According to S.73 of the Bills of Exchange Act, a cheque is a bill of exchange drawn on a banker payable on demand. According to S.3(z') of the Act:-

" A bill of Exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or the order of a specified person or bearer".

According to the above provisions, for the plaintiff to be said to have issued the cheques in question to the defendant, the plaintiff should have written the cheque in.the name of the defendant or to the order of the defendant.

tion the defendant. negative. The plaintiff should also have written on the cheques the amount of money which the defendant would with-draw from the bank. The plaintiff did none of the above two requirements. By merely signing a blank cheque without the amount, the date the . and the **payee,-./** plaintiff did not even have in her contempla-Issue number Six is also answered in thej/~

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Issue number Seven is whether the plaintiff owes the sum claimed in the Counter-claim to the defendant. This sum is shs.50,631,849/= which was subject of the dishonoured cheques. If the plaintiff did not issue those cheques under issue issue number seven also in the negative. number 6, it follows that even if those cheques were dishonoured the plaintiff cannot make them goods. I determine *(S-)*

X *I* now go back to issue number One whether the facts quoted What are those facts? , 'in paragraph 8 of the plaint are true. They are as contained in the letter of M/S. Mulenga & Kalemera, Advocates dated 24/10/97 as follows:-

> *f* "In or about July 1997 our client discovered that goods purchased by your Company from our client had not been paid for as a result of the fraudulent concealment of your company's indebtedness by your late husband Mr. Tony Twinomugisha who was also our client's Chief Accountant. *^r* Our client further discovered a series of cheques issued by your company in purported settlement of your dues which had been receipted but were never banked and instead were kept aside by your late husband. - 9 -

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When our client discovered and presented them for payment they were all dishonoured. According to our instructions you are signatory to all the cheques".

It is true the plaintiff was signatory to all the cheques and this has been considered and found not to be consequential to the case. The rest of the allegations which the advocates say were discovered by the defendant are true. However, plaintiff had no company and in fact the defendant has failed to prove the existence of any such company, any way. It is not true that the cheques which were dishonoured were issued by any company because, as has been observed, the cheques belonged to a joint account of the plaintiff and the deceased and the account belonged to no company. $\mathtt{It}$ $\sqrt{2}$ is false and fallacious to blame the plaintiff for and fraudulent concealment of the indebtedness to the defendant committed by the deceased. There is no reason whatsoever why the plaintiff should be vicariously liable for the fraudulent concealment perpetrated by her late husband. If anyone was to be blamed it should have been the administrator of the deceased's estate, which the plaintiff was not. He paid shs. 10,000,000/= $\ell$ part of the debt and it is inconceivable that the plaintiff should have been threatened with being reported to the Police for fraud and for issuing false cheques when she never committed the fraud and never issued the cheques in the sense of S.73 and S. 3 of the Bills of Exchange Act, 20 Cap.76.

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I find in fact that the advocates'iletter did harass and intimidate the plaintiff. The report to the Police of the ^plaintiff, her, being charged with the serious offence of issuing false cheques and the conditions on which she obtained the Police bond which were restrictive of her movements, and ^&lt; requiring her to regularly report to the Police, were harassment of the highest order.

Either the defendant or its advocates should have made proper investigations into the law and facts and had they done so, they would have come to conclusions contrary to those they are alleged to have come to in the advocates' letter of 24/10/97. /O

On issue number one I hold that the facts quoted in paragraph 8 of the plaint were false.

Since they were not correct, then the defendant was not justified to rely on them to report the plaintiff to the Police. My answer to issue number 2 is therefore in the negative. *fJT* I agree that it was harassment and damaging for the defendant to have reported the plaintiff to the Police which report resulted in the plaintiff's charging with a serious offence.

Issue number 3 is whether the defendant conducted a campaign and crusade against the plaintiff in the manner pmd for the purposes stated in paragraph 9 of the plaint. It is pertinent to extract paragraph 9 of the plaint

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"9. The plaintiff does not and has never owned or been a member of a Company called Tyresland (U) Ltd, the said Company has never issued cheques to the defendant nor indeed has the plaintiff ever issued the cheques to the defendant for the consideration of any goods or her $\ll$ husband's indebtedness at all--".

These are statements of fact.

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"and the defendant's campaign and crusade against the plaintiff is for the purposes of extorting money against her and/or by use of the Police and/or the Police report and/or the threat of Criminal arrest 70 and prosecution and other similar unlawful means of obtaining the sum of shs.30,631,849/= from her".

I could not agree more with these averments. The letter (Exp.4) from M/S. Byamugisha & Rwaheru addressed to the defendant explained all the circumstances of the defendant's $1.1$ claims against the plaintiff. It advised the defendant to establish whether the defendant indeed supplied the goods to any company and whether, if there was any such company, it was the plaintiff's Company. The letter pointed out the malice and the falsity of reporting the plaintiff to the Police, which $2\mathcal{D}$ verv report led to her being charged with Z serious felony. It is inconceivable that the reply to the letter addressed by the defendant's lawyers to the plaintiff's lawyer was so false and militant and so to say, rubbed salt into the wound. It was so false that it alleged, among other things, that the plaintiff had admitted liability for the debt by payment $\chi$ of shs. 10,000,000/ $\approx$ .

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to be harassed, intimidated and embarrassed with Criminal charges and Police Bonds. She testified that in reporting to the Police she had to use her motor vehicle which should have otherwise been deployed on income generating business. She stated that she is a diabetic and that the harassment made her health grow worse. Particulars and details of the plaintiff's complaints are better set out on pages 11 and 12 of the defendant\*s Counsel's submissions. Those complaints were made in Court on Oath in the examination in-Chief. Yet no effort whatsoever was made by Counsel for the defendant to challenge the plaintiff Attacking her in the submissions cannot discredit her testimony. (DW4)seems to thinkythat the money misappropriated by the deceased was much. That was no reason at all for the plaintiff as to the veracity of her complaints. instead carried out further intimidations against the plaintiff. This was indeed a crusade against the plaintiff as viewed by her an innocent Ugandan widow who had never been called upon before by the Police to answer Criminal charges of such magnitude\* It is no excused\*, as the Executive Director of the Defendant Yet the defendant and/or its lawyers should have realised that the payment of shs. 10,000,000/= was made by Mr. Bishagenda^t the administrator of the deceased's estate and not the plaintiff The defendant failed to ascertain the facts and the law and

I think that she was unreasonably reported to the Police.

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plaintiff into */O* Recklessness of the and that unrepentant mood as was exhibited in the letter is as bad if not worse than naked malice. written by M/S. Mubiru, Musoke, Musisi & Company Advocates to M/S. Byamugisha & Rwaheru, Advocates, on 11th September 1999, */S'* pay. nature of the behaviour of the defendant towards the plaintiff The defendant might as well have not maliciously reported the r" plaintiff with intent to injure her. However, my considered opinion is that DW4, overwhelmed with the large amount of loss of shs. 40,000,000/= plus and hatred for the deceased, acted recklessly and treated the plaintiff very shabbily and cruelly, to use her lawyers complaint. All the harassment by reporting to the Police was calculated to capitulate the paying the debt which the defendant and/or its Counsel ought to have known she was not liable to

Counsel for the defendant contends that his client was the Police as an With due respect if accusations to the Police are false and who nor should the defendant plead that since the she cannot complain. justified in reporting the plaintiff to the Police and that independent authority acted independently. Law with it; plaintiff has not yet been prosecuted Certainly the definition of "malicious or injurious falsehood" which Counsel for the defendant quotes from Osbornes Concise Dictionary very well fits the acts of the defendant committed-^-' against the plaintiff and I find for her. they end the accused in falsely being treated the person made the false accusations should not be allowed to get a way

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What remains is the amount of damages payable to her which I must now consider.

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Dr. Byamugisha, in his final submissions at p.7 (see last paragraph) states:-

"I pray that you award the sum of shs.30,631,847/=, the ransom for which the defendant held plaintiff hostage, to the plaintiff gainst the defendant in exemplary I also ask for costs of the suit and the damages. dismissed counter-claim".

I am afraid I cannot see the basis for awarding to the plaintiff a sum equivalent to the sum claimed in the Counter-The damages to be awarded must be commensurate with the claim. damage occasioned. In her prayer in the plaint, the plaintiff $\sqrt{n}$ sought general damages as well as exemplary and/or punitive damages, under two heads. In the submissions, Counsel Byamugisha seems to have restricted himself to only exemplary damages. Exemplary damages are, so to say, extra damages. They are spoken of as though the object of allowing them were punitive, and to deter others offending in like cases. The better view seems to be, however, not that they are consolatory rather than penal, resting upon the principle that where is malice the plaintiff suffer from a sense of wrong and is entitled to a solatium for that mental pain. In the case of LOUDON -vs- RYDER /795372 Q. B.202, the English Court of Appeal approved the direction given to the jury by Devlin, J,

to the effect that they should think of punitive damages "a fine which has to hit the defendant hard if he has disregarded the rights of others and show that that sort of conduct does not pay".

*IV* of this judgment till payment in full. I respectfully take the above view of Devlin, J, in this case and find that the defendant's malice and or reckless disregard of the rights of the plaintiff should be penalised I will not consider general to the benefit of the plaintiff. damages and exemplary damages as separate remedies in this - case. **I will,** doing the best I can, award the plaintiff a sum of shs. 15,000,000/= Fifteen Million Shillings) as a fair compensation for her harassment, defamation and mental as well as physical anguish. The defendant is ordered to pay it with costs and at an interest at Court rate from the date

Order accordingly.

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## IN THE HIGH COURT OF UGANDA AT KAMPALA

## **CIVIL SUIT NO 1031 OF 1998**

| RESTETUTA<br>TWINOMUGISHA | | PLAINTIFF | |----------------------------|---------------|-----------| | | - VERSUS<br>- | | | UGANDA<br>ALUMINIUM<br>LTD | | DEFENDANT |

## DECREE

This suit coming for final disposal this 19th January, 2000 before the Honourable Mr Justice Ntabgoba, PJ and after reading the pleadings and hearing Dr Byamugisha for the plaintiff and Mr Musisi for the defendant it is hereby ordered and decreed that defendant's counterclaim be dismissed and thatjudgment be entered for the plaintiff against the defendant for:-

- Shs 15,000,000/- in damages; a) - Costs; b) - Interest at court rate from the date ofjudgment until payment in full. c)

WE APPROVE

for: **BYAMUGIS**

Please receive herewith draft decree for approval.

## for: **MUBIRU - MUSOKE, MUSISI & CO ADVOCATES**

GIVEN under my hand and the seal ofthis court this day of , 2000.

**W-**

*0* **REGISTRAR**

**DRAWN AND FILED BY:**

MUBIRU - MUSOKE, MUSISI & CO ADVOCATES

RAJA CHAMBERS

3 PARLIAMENT AVENUE

P. O. BOX 1411, KAMPALA