Nile Bank (U) Limited v Translink (U) Limited

Supreme Court · [2005] UGSC 7 · 2005 Appeal Allowed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second civil appeal from the Court of Appeal, arising from a High Court suit for breach of the banker-customer contract and a counter-claim for an overdraft

Decision

Appeal allowed; Court of Appeal decision set aside, respondent's suit dismissed and appellant's counter-claim for shs.11,472,681 upheld with interest and costs

The full judgment

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Holding

The Supreme Court allowed the appeal. Construing a deed of indemnity providing that a disputed shs.20m credit would be treated as an interest-free overdraft "in the event the investigations prove conclusively in writing" that the sum was never deposited, the Court held that what the parties required was conclusive proof of that fact, not a final police report after conclusion of any criminal prosecution. The police report (Exh.P4), summarizing a handwriting expert's finding that the deposit slip was forged, constituted such conclusive proof. The Court of Appeal had misconstrued both the parties' intention and the evidence. The appeal was allowed, the respondent's suit dismissed, and the appellant's counter-claim of shs.11,472,681 upheld with interest and costs.

Facts

Translink maintained Uganda shilling and US dollar current accounts at Nile Bank. A dispute arose over whether Translink had deposited shs.30m or only shs.10m on 23 November 1994. To resolve the impasse, the bank credited the disputed shs.20m to Translink's shilling account, and Translink executed a deed of indemnity dated 18 April 1995 covenanting that if the ongoing police investigation proved conclusively in writing that the shs.20m was never deposited, that sum would be treated as an interest-free overdraft. In August 1996 Translink moved to close both accounts. The bank refused, relying on the indemnity, and on 19 September 1996 informed Translink that the police report (Exh.P4) confirmed the money had not been deposited, leaving shs.11,472,681 owed. Exh.P4 summarized a handwriting expert's finding that the deposit slip purporting to evidence a shs.30m deposit bore a forged stamp and signature, indicating only shs.10m had been banked. Translink sued for breach of contract; the bank counter-claimed for the overdraft balance.

Issues

Whether the police report dated 5 September 1996 (Exh.P4) amounted to conclusive proof in writing, within the meaning of the deed of indemnity, that the disputed sum was never deposited.
Whether the deed of indemnity required the parties to await the conclusion of any criminal prosecution resulting from the police investigation before it could be invoked.
Whether the Court of Appeal misapprehended the evidence concerning the charging and prosecution of the suspects.

Orders

Appeal allowed.
Judgment and orders of the Court of Appeal set aside.
Substituted judgment dismissing the respondent's suit.
Appellant's counter-claim upheld for shs.11,472,681 with interest at the court rate from the date of judgment till payment in full.
Costs of the appeal and in the courts below awarded to the appellant.

Key headnotes

Contract Law — Interpretation — Ascertaining intention from the words of the document

In construing a written contract, the court must discern the intention of the parties from the words used in the document, ascertaining their intention as expressed in the document itself.

Contract Law — Deed of Indemnity — Meaning of "conclusive proof in writing"

Where a deed of indemnity provides that a sum shall be treated as an overdraft in the event investigations prove conclusively in writing a particular fact, what is required is conclusive proof of that fact, and not a final police report following the conclusion of any resulting criminal prosecution.

Evidence — Burden of proof — Secondary evidence of an expert finding

Where a party tenders a document summarizing an expert's finding, the onus lies on the party disputing its accuracy or credibility to adduce cogent evidence to discredit it; that party cannot shift onto the opposing party the burden of producing better or further evidence of the expert finding.

Civil Procedure — Second appeal — Interference with findings of fact

A second appellate court may interfere with the findings of fact of the first appellate court where those findings result from a misapprehension or misconstruction of the evidence on record.

Banking & Finance — Banker and customer — Right of a prudent banker

A prudent banker is entitled to resist a customer's attempt to close its accounts where immediate closure would prejudice the banker's rights, but may appropriate the customer's balances only on the basis stipulated by the parties' agreement.

Legislation cited (1)

Rules of the Supreme Court r.93

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.