Bank of Africa Uganda Limited v Ssemaganda and Another ( T A Holyways Hostel) (Civil Appeal No. 131 of 2021)
Observed later treatment
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Holding
The Court of Appeal dismissed the bank's appeal against a High Court award to mortgagors whose land was sold irregularly. The Court held that the trial Judge properly exercised his discretion in preferring one valuation report over others, that an appellate court will not interfere with a valuation unless a wrong principle was applied or the estimate was entirely erroneous, and that unchallenged expert handwriting evidence proving forgery of a default notice was correctly accepted. Although general and aggravated damages were assessed separately, this was form not substance, as the Judge intended an enhanced combined award. Punitive damages may be awarded against private parties where the conduct is contumelious. The costs order affecting a non-party could not be disturbed on appeal.
Outcome
Appeal dismissed; High Court judgment awarding compensation and damages to the respondents upheld
Facts
Between January 2010 and September 2011 the respondents obtained three loan facilities from the appellant bank, consolidated into a single facility of about UGX 507,490,364, secured by a mortgage over their land at Kireka comprising Holyways Hostel. After the respondents faced financial hardship and were unable to meet repayments, the bank sold the suit land by private treaty around December 2013. The trial Judge found the bank sold without serving a demand/default notice, without notice of sale, by private treaty without the respondents' consent, and at an undervalue, rendering the sale unconscionable. Because a bona fide purchaser had acquired the land, reinstatement was refused and compensation was ordered instead. The trial Judge relied on valuation report Exhibit P9 (UGX 925,000,000 as at 2011), found the value had appreciated, and awarded compensation of the true value less the outstanding loan, plus general, aggravated and exemplary damages. Expert handwriting evidence established the second respondent's signature on the default notice was forged. The bank appealed on evaluation of valuation evidence, reliance on the expert evidence, and the damages and costs awards.
Issues
- Whether the trial Judge wrongly evaluated the three valuation reports in basing compensation on the value in Exhibit P9.
- Whether the trial Judge wrongly relied on the uncorroborated evidence of the first respondent regarding developments and value of the suit land.
- Whether the trial Judge wrongly relied on handwriting expert evidence to conclude that the second respondent's signature on the default notice was forged and no notice was served.
- Whether the trial Judge erred in awarding both general and aggravated damages, and in awarding punitive/exemplary damages against a private party.
- Whether the trial Judge erred in ordering the second defendant, not a party to the appeal, to pay costs.
Orders
- Appeal dismissed.
- Costs of the appeal awarded to the respondents.
Rules and key headnotes
Legislation cited (12)
- Mortgage Act 2009 s.19
- Mortgage Act 2009 s.27(1)
- Mortgage Act 2009 s.29(4)
- Mortgage Regulations reg.11(2)
- Evidence Act Cap.6 s.101
- Evidence Act Cap.6 s.103
- Evidence Act Cap.6 s.133
- Constitution of Uganda 1995 Article 26(1)
- Constitution of Uganda 1995 Article 126(2)(c)
- Judicature (Court of Appeal) Rules Directions S.I. 13-10 rule 30(1)(a)
- Judicature (Court of Appeal) Rules Directions S.I. 13-10 rule 30(1)(b)
- Bank of Uganda Consumer Protection Guidelines 2011
Cases cited (16)
- Jeanne Frances Nakamya v DFCU Bank and Another (Civil Appeal No. 105 of 2013)
- Bank of Nova Scotia vs. Rosegreeen and Others, Claim No. CL 1998/8240
- Kimani v Republic [2000] 1 EA 417
- Mufumba v Uganda Development Bank (Civil Appeal No. 241 of 2015)
- Zaabwe v Orient Bank Ltd (Civil Appeal No. 4 of 2006)
- Crown Beverages Ltd v Sendu Edward (Civil Appeal No. 1 of 2005)
- Kiska Ltd v Vittorio De Angelis [1969] EA 6
- Interfreight Forwarders (U) Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
- General Parts (U) Ltd v Non-Performing Assets and Recovery Trust (Civil Appeal No. 5 of 1998)
- Ahmed Ibrahim Bholm v Car and General Ltd (Civil Appeal No. 12 of 2002)
- Uganda Revenue Authority v Wanume David Kitamirike (Civil Appeal No. 43 of 2010)
- Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
- Federal Commissioner of Taxation v St. Helens Farm (A.C.T.) Pty. Ltd [1981] HCA 4
- Livingstone v Rawyards Coal Company (1880) 5 App Cas 25
- Rookes v Barnard [1964] 1 All ER 367
- Broome v Cassell & Co Ltd and Another [1971] 2 All ER 187
Cases citing this judgment (1)
How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.