Wakilii

Kabuye v Bank of Uganda (Civil Appeal 48 of 2010)

Court of Appeal · [2018] UGCA 235 · 2018 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from High Court dismissal of suit for breach of employment retirement package terms
Decision
Appeal allowed; appellant awarded Shs. 20 million general damages with interest at 20% per annum from 24.04.1995, with costs

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Holding

The Court of Appeal allowed the appeal, holding that the trial Judge failed to properly evaluate the evidence. The severance package promised to the appellant under the involuntary retirement scheme was, in all respects, similar to that under the voluntary termination scheme, which excluded set-off of housing loans. The respondent breached its contractual obligation by arbitrarily deducting the entire housing loan at once from the appellant's terminal package, contrary to the agreed instalment arrangement and without first requiring execution of a mortgage. Though a refund of the deducted loan was refused (the repayment period having expired), the Court awarded the appellant Shs. 20 million general damages with interest.

Facts

The appellant was employed by the respondent from 1987 until 30.04.1995 when he was compulsorily retired as a Principal Banking Officer under the respondent's involuntary retirement scheme. The respondent represented that pensionable staff retired under the involuntary scheme would receive a severance package similar in all respects to that awarded to staff under the voluntary termination scheme (VTS) of December 1994. Under the VTS terms (Exhibit D1, paragraph 5), the bank could set off personal loans but not housing loans, which would be registered as a legal mortgage and repaid over an agreed period. The appellant had taken a housing loan repayable in 240 instalments to 2010 and a personal loan. On retirement, the respondent deducted all loan amounts at once from his terminal package, consuming the entire package and leaving him still indebted. The appellant sued in HCCS No. 93 of 2001 seeking refund of the deducted housing loan and damages. The High Court dismissed the suit with costs on 27.03.2009.

Issues

  1. Whether the trial Judge properly evaluated the evidence before dismissing the appellant's suit.
  2. Whether there was an agreement that the appellant's outstanding housing loan would not be deducted from his severance package all at once at the time of termination.

Orders

  • Appeal allowed.
  • Judgment dismissing HCCS No. 93 of 2001 set aside.
  • Judgment substituted in favour of the appellant against the respondent.
  • Award of Shs. 20 million general damages with interest at 20% per annum from 24.04.1995.
  • Prayer for refund of deducted housing loan amount refused.
  • Costs of the appeal and of the court below awarded to the appellant.

Key headnotes

Appeals — Duty of First Appellate Court — Re-evaluation of Evidence
A first appellate court has a duty to re-hear the case by re-evaluating and re-appraising the evidence and materials before the trial court and drawing its own inferences on law and fact, while remaining conscious that it did not observe the demeanour of witnesses.
Construction of Contract — Terms Incorporated by Reference — 'Similar in All Respects'
Where one scheme's package is expressed to be 'similar in all respects' to another scheme's package, it incorporates the entirety of the other scheme's terms; selectively excluding a material clause would defeat the express promise of similarity.
Loan Repayment — Set-off of Housing Loan — Arbitrary Recall in Breach of Instalment Agreement
A bank is not entitled to arbitrarily recall a housing loan and deduct it in one lump sum from a retiree's terminal package where there is an existing agreement for repayment in instalments, particularly without first giving the affected party a hearing or requiring execution of a mortgage.
Mortgage — Duty of Mortgagee Holding Title — Renewal of Expired Lease
A mortgagee in possession of a title certificate has a right and duty to extend or renew an expired lease subject to the mortgage, and cannot rely on the expiry of the security lease to justify recalling the loan where it never demanded execution of the mortgage.
Damages for Breach of Contract — Measure and Heads — Social and Psychological Suffering
Damages for breach of contract are those arising naturally from the breach or reasonably within the contemplation of the parties; where circumstances dictate, damages may also be awarded for social and psychological suffering, disappointment, or physical inconvenience, the purpose being to restore the injured party to the position they would have occupied had the contract not been breached.
Interest on General Damages — Running from Date of Loss Rather than Judgment
Although interest on general damages normally runs from the date of judgment, where a party has been deprived of the use of money from an earlier date and is denied a refund, the court may justly order interest to run from the date the deprivation occurred.

Cases cited (3)

  • Bank of Uganda v Masaba and 5 Others (Civil Appeal No. 3 of 1998)
  • Fr. Naransio Begumisa and 3 Others v Eric Tibebaga (Civil Appeal No. 17 of 2002)
  • V.R. Chande v East African Airways Corporation [1964] EA 5
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.