Wakilii

Barclays Bank of Uganda Ltd v Gamuli Tukahirwa (Civil Appeal 88 of 2016)

Court of Appeal · [2019] UGCA 2087 · 2019 Appeal Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second appeal from High Court decision on appeal from Chief Magistrate's Court
Decision
Appeal partly allowed; High Court award of UGX 60,000,000 general damages set aside and trial court's UGX 5,000,000 award reinstated with 35% interest; principal sum and bank liability upheld.

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Cited — treatment unverified cited in 2 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

The Court of Appeal partly allowed the second appeal. It held that the first appellate High Court Judge erred in law by increasing general damages from UGX 5,000,000 to UGX 60,000,000 where the respondent had not cross-appealed and the parties were not heard on the issue, contravening the right to a fair hearing and Rule 102(c). The court set aside that award and reinstated the trial court's UGX 5,000,000 award. It upheld interest at 35% per annum as awarded by the trial magistrate and confirmed the finding that the appellant bank was negligent in paying out a forged cheque, making it liable to refund the principal sum of UGX 18,840,000.

Facts

The respondent maintained a current account with the appellant bank. He alleged that the bank negligently honoured and paid out a cheque (number 0138) for UGX 18,840,000 that he neither signed nor issued. The cheque had been altered from cheque leaf number 0133, which the respondent had earlier reported as stolen and on which he had stopped payment; leaf 0138 remained intact in his cheque book. The fraudster's phone number written on the back of the cheque differed from the respondent's registered number, yet the bank's employees did not detect the discrepancy or the forged signature, and failed to use the bank's ink room to verify authenticity. The Chief Magistrate's Court found the bank negligent and ordered refund of UGX 18,840,000 plus UGX 5,000,000 general damages with 35% interest. On first appeal, the High Court increased general damages to UGX 60,000,000 despite no cross-appeal by the respondent.

Issues

  1. Whether the first appellate High Court Judge erred in law by increasing the award of general damages from UGX 5,000,000 to UGX 60,000,000 in the absence of a cross-appeal and without affording the parties a hearing on the issue.
  2. Whether the first appellate Judge erred in awarding interest at 25% per annum on general damages and 32% per annum on the principal sum, where these rates were not awarded by the trial court and not the subject of any appeal.
  3. Whether the first appellate Judge erred in upholding the finding that the appellant bank was liable to refund the principal sum on the basis that it had been negligent.

Orders

  • This appeal substantially fails having succeeded only in respect of ground 1, the rest of the grounds having been dismissed.
  • The appellant shall pay the respondent special damages of UGX 18,840,000.
  • The appellant shall pay the respondent UGX 5,000,000 being general damages.
  • The special damages of UGX 18,840,000 shall attract interest at 35% per annum from 21 February 2011, the date the suit cheque was paid out, until payment in full.
  • The general damages of UGX 5,000,000 shall attract interest at 35% per annum from 11 December 2014, the date of delivery of judgment by the trial Chief Magistrate's Court, until payment in full.
  • The appellant shall pay the respondent full costs of the suit at the trial Court and those of the appeal at the High Court.
  • The appellant shall pay the respondent half of the costs of the appeal to this Court.

Key headnotes

Appeals — Cross-Appeal — Appellate Court Cannot Vary Award in Favour of Respondent Absent Cross-Appeal
An appellate court has no jurisdiction to increase or vary an award in favour of a respondent who has not lodged a cross-appeal or given notice contesting the award, and doing so without hearing the parties on the issue is an error of law.
Appeals — Grounds of Appeal — Mandatory Requirement Under Court of Appeal Rule 102(c) and O.43 r.2 CPR
A court shall not allow an appeal or cross-appeal on a ground not set forth or implicit in the memorandum of appeal without affording the affected party an opportunity to be heard on that ground; these provisions are mandatory.
Banker and Customer — Duty of Care — Liability for Paying Out a Forged Cheque
A bank owes its customer a duty to exercise reasonable care and skill, and where it negligently pays out a forged or altered cheque it cannot charge the customer's account with the money so lost and is liable to refund the sum.
Bills of Exchange — Forged Signature — Section 23 Bills of Exchange Act
Under section 23 of the Bills of Exchange Act, a forged or unauthorised signature on a bill is wholly inoperative, and no right to retain the bill or enforce payment can be acquired through it unless the party is precluded from setting up the forgery.
Interest on General Damages — Compensatory Nature — Runs from Date of Judgment
Interest on general damages is compensatory against the party in breach of contractual obligations and runs from the date of judgment until payment in full.
Second Appeals — Section 72 Civil Procedure Act — Limited to Matters of Law
On a second appeal under section 72 of the Civil Procedure Act, the court is confined to questions of law and must determine whether the first appellate court applied the basic principles governing its task, including re-evaluation of the trial evidence.

Legislation cited (5)

  • Civil Procedure Act s.72
  • Judicature Act s.33
  • Court of Appeal Rules r.102(c)
  • Civil Procedure Rules O.43 r.2
  • Bills of Exchange Act s.23

Cases cited (10)

  • Pandya v R [1957] EA 336
  • Mohammed Mohammed Hamid v Roko Construction Ltd (Civil Appeal No. 1 of 2003)
  • Star Supermarket (U) Ltd v Attorney General (Civil Appeal No. 34 of 2000)
  • Fernandes v The People [1972] EA 62
  • Consultant Surveyors and Planners v Standard Bank [1984] HCB 57
  • Stanbic Bank (U) Ltd v Uganda Crocs Ltd (Civil Appeal No. 4 of 2004)
  • Maimuna v Wilson Njau Nyaki (Civil Appeal No. 131 of 1994)
  • Peters v Sunday Post Ltd [1958] EA 424
  • Watt v Thomas [1947] 1 All ER 582
  • Astariko EA Abuli -vs- Elifas M. Ambaisi Civil Appeal No. 228 of 199
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.