Wakilii

Bank of Uganda v Kabuye (Civil Appeal 6 of 2020)

Supreme Court · [2023] UGSC 51 · 2023 Appeal Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second civil appeal from a decision of the Court of Appeal, limited to the rate of interest on general damages and the date from which it accrues
Decision
Appeal partly allowed: 20% interest rate upheld but ordered to run from the date of the suit instead of the date of retrenchment

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Cited — treatment unverified cited in 1 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

On a second appeal limited to interest, the Supreme Court held that the award of interest under section 26(2) of the Civil Procedure Act is a matter of judicial discretion with which an appellate court will not interfere absent a wrong principle or resulting injustice. The Court of Appeal had exercised its discretion judicially in awarding 20% per annum, given the respondent's sudden retrenchment, the arbitrary deduction of his retirement package and inflationary trends; the default 6% rate would not meet the ends of justice. However, interest should run from the commencement of the suit to full payment under section 26(2), not from the date of retrenchment. The appeal partly succeeded.

Facts

The respondent was employed by the appellant bank from 1987 until 30 April 1995, when he was compulsorily retired at the level of Principal Banking Officer under the bank's involuntary retirement scheme. The appellant represented that, like staff retired under the voluntary termination scheme, he would receive a severance package under which an outstanding housing loan would not be deducted from the retirement package. On retirement the appellant nonetheless deducted the respondent's housing and personal loan amounts from his retirement package, consuming it entirely and leaving him still indebted. The High Court dismissed his suit, but the Court of Appeal set aside that judgment, declined to order repayment of the wrongly deducted loan, and awarded him UGX 20,000,000 general damages with interest at 20% per annum from the date of retrenchment. On further appeal the appellant abandoned the breach findings and the damages quantum, contesting only the interest rate and its start date.

Issues

  1. Whether the Court of Appeal exercised its discretion judicially in awarding interest at 20% per annum on the UGX 20,000,000 general damages.
  2. Whether the Court of Appeal was justified in law in ordering the interest to run from the date of retrenchment rather than the date of judgment.

Orders

  • The Court of Appeal's decision on interest at 20% per annum is upheld.
  • The interest is to accrue from the commencement of the suit until payment in full.
  • Costs in this Court and in the courts below are awarded to the respondent.

Key headnotes

Civil Procedure — Interest — Award of Interest as a Matter of Judicial Discretion
The award of interest under section 26(2) of the Civil Procedure Act is a matter of the court's discretion, and an appellate court will not interfere with that discretion unless it is shown that the lower court acted on a wrong principle or that the exercise of discretion was manifestly wrong and occasioned injustice.
Civil Procedure — Interest — Rate Exceeding the Statutory Default
A court may award interest at a rate higher than the 6% statutory default where the circumstances of the case demonstrate that the default rate cannot satisfy the ends of justice; the 6% rate under section 26(3) applies only where the decree is silent as to further interest.
Damages & Quantum — Interest on General Damages — Date from Which Interest Runs
Interest on general damages forming part of a decree for the payment of money runs from the date of the suit to full payment under section 26(2) of the Civil Procedure Act, and not from the date of the wrong complained of.
Civil Procedure — Second Appeal — Re-evaluation of Evidence and Concurrent Findings
A second appellate court is not expected to re-evaluate the evidence or question concurrent findings of fact by the High Court and Court of Appeal, except where it is shown that the lower courts failed to evaluate the evidence or were manifestly wrong on findings of fact.

Legislation cited (3)

  • Civil Procedure Act (Cap 71) s.26
  • Civil Procedure Act (Cap 71) s.26(2)
  • Civil Procedure Act (Cap 71) s.26(3)

Cases cited (13)

  • Hope Mukankusi v Uganda Revenue Authority (Civil Appeal No. 6 of 2011)
  • Omunyakol Akol Johnson v Attorney General (Civil Appeal No. 6 of 2012)
  • Prem Lata v Peter Musa Mbiyu [1965] 1 EA 592
  • Sietco v Noble Builders (U) Ltd (Civil Appeal No. 31 of 1995)
  • Premchandra Shenoi & Another v Maximor Oleg Petrovich (Civil Appeal No. 31 of 2003)
  • Tito Buhingiro v Uganda (Criminal Appeal No. 8 of 2014)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Mot v Chanchalbhai (1915/1916) 6 EALR 1
  • Uganda Development Bank v National Insurance and Another (Civil Appeal No. 28 of 1995)
  • Mbogo v Shah [1968] EA 93
  • Shah v. Allu [1974] 14 EACA
  • Bank of Uganda v Masaba & 5 Others (Civil Appeal No. 3 of 1998)
  • Flint v Lowell [1935] 1 KB 354
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.