Uganda Railway Corporation v Kasolo Kiberu and 128 Others (Civil Appeal No. 30 of 2014)

Court of Appeal · [2022] UGCA 167 · 2022 Appeal Partly Allowed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Civil appeal from a High Court judgment awarding pension and terminal benefits to former employees

Decision

Appeal allowed in part; High Court order requiring payment of pension benefits for pre-1 July 1977 service set aside, award of general damages upheld

The full judgment

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Holding

The Court of Appeal held that the appellant corporation had no legal obligation to include the respondents' pre-1 July 1977 service with the East African Railways Corporation when computing pension and terminal benefits, as that liability had been assumed by the Government of Uganda under the East African Community Mediation Agreement and the Pensions Act (Amendment) Decree. Estoppel arising from confirmation letters and certificates could operate only as a shield, not as a basis for a claim. Grounds 1 and 2 were allowed. The award of general damages was upheld given inflation and partial success. Costs in the High Court were reduced to 50% for the respondents. Appeal allowed in part.

Facts

The respondents were former employees of the East African Railways Corporation who joined the Uganda Railways Corporation following the collapse of the East African Community in 1977. They sued the appellant, their former employer, claiming unpaid pension and terminal benefits totalling UGX 1,375,079,500, contending that their period of service with the East African Railways Corporation prior to 1 July 1977 should be included in the calculation. They relied on letters of appointment, confirmation letters and certificates of service in which the appellant had recognised the earlier service. The appellant argued that liability for the pre-1977 period had been assumed by the Government of Uganda under the East African Community Mediation Agreement 1984 and the Pensions Act (Amendment) Decree No. 6 of 1978, and that any prior recognition of that service had been issued in error. The High Court found the appellant ought to have included the earlier period, awarded interest at 10% and UGX 2,000,000 general damages to each respondent, plus two-thirds costs. The appellant appealed.

Issues

Whether the appellant was obliged to take into account the respondents' period of service with the East African Railways Corporation prior to 1 July 1977 when calculating their pension and terminal benefits.
Whether the appellant's prior recognition of the pre-1977 service through confirmation letters and certificates of service created an enforceable obligation by way of estoppel.
Whether the trial judge erred in awarding each respondent UGX 2,000,000 as general damages.
Whether the trial judge erred in awarding two thirds of the costs to the respondents.

Orders

Appeal allowed in part.
The High Court judgment ordering the appellant to pay the respondents' pensionable benefits for service with the East African Railways Corporation prior to 1 July 1977 is set aside to that extent only.
Ground 3 (general damages) disallowed; award of general damages upheld.
Ground 4 allowed in part; respondents entitled to 50% of their costs in the High Court.
Appellant awarded one half of its costs in the Court of Appeal.

Key headnotes

Employment & Labour — Pension and Terminal Benefits — Liability for Pre-Succession Service

A successor employer is not obliged to compute pension and terminal benefits by reference to an employee's earlier service with a predecessor statutory corporation where, by treaty and subsequent legislation, the liability for that earlier service has been assumed by the State.

Estoppel — Scope — Estoppel as a Shield Not a Sword

Estoppel operates only as a defence to a claim and cannot itself constitute the basis for instituting a claim; a party cannot found a cause of action upon the other party's erroneous prior recognition of an obligation.

Statutory Interpretation — Estoppel Against Statute

There is no estoppel against a statute or a legal provision, and conduct or representations cannot supersede a clear statutory allocation of liability.

Damages & Quantum — General Damages — Appellate Interference with Discretion

An appellate court will interfere with a trial court's award of general damages only where the court acted on wrong principles or where the amount is manifestly excessive or manifestly low; otherwise the discretionary award will not be disturbed.

Civil Procedure — Costs — Discretion to Follow the Event

Costs are awarded in the discretion of the court and should follow the event under section 27 of the Civil Procedure Act; where parties achieve only partial success, the court may apportion costs accordingly.

Legislation cited (15)

Pensions Act (Amendment) Decree No. 6 of 1978 s.4(2)
Pensions Act s.1(1)
Pensions Act s.1(g)(iii)
Pensions Act s.7(2)
East African Community Mediation Agreement Act No. 7 of 1987 Article 10.05
East African Railways Corporation Act s.3
East African Community Act 1967 Article 71
East African Railways Corporation Pensions Regulations (Legal Notice No. 24 of 1970) reg.3(1)
Uganda Railways Corporation Decree No. 14 of 1977 s.1(1)
Uganda Railways Corporation Decree No. 14 of 1977 s.2
Uganda Railways Corporation Decree No. 14 of 1977 s.12
Uganda Railways Corporation Act 1992 s.93
Uganda Railways Corporation Act 1992 s.94(1)
Civil Procedure Act s.27(1)
Civil Procedure Act s.27(2)

Cases cited (3)

Maritime Electric Co Ltd v General Dairies Ltd [1937] AC 610
Stroms Burks Bolae and Others v J & P Hutchison 41 S.L.R 274
Omunyokol Akol v Attorney General [2012] UGCA 15

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