Wakilii

Bank of Uganda and Another v Kaweesi and Others (Miscellaneous Application 1047 of 2022)

High Court · [2023] UGCOMMC 47 · 2023 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to strike out plaint arising from civil suit concerning liquidation of Greenland Bank Limited
Decision
Claim in respect of seventeen associated companies struck out; remaining claims to proceed to trial

Observed later treatment

Cited — treatment unverified cited in 12 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 12 times with no adverse treatment recorded; not yet tested on the merits. Citations rising — 11 citing cases on record, 11 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The court held that shareholders lack locus standi to sue for wrongs done to associated companies absent a properly constituted derivative action, and struck out that aspect of the claim. The court found that the claim regarding Plot 30 Kampala Road was not res judicata as it concerned post-judgment execution matters not previously litigated. On limitation, the court ruled that determining when causes of action accrued required contested factual findings that could not be resolved as a preliminary point of law, and overruled the limitation objections, allowing those issues to proceed to trial.

Outcome

Claim in respect of seventeen associated companies struck out; remaining claims to proceed to trial

Facts

Greenland Bank Limited was placed under liquidation by Bank of Uganda on 1 April 1999. The respondents, as shareholders of the bank, filed suit in February 2022 alleging that the liquidation process spanning over 21 years was irregular, fraudulent, and in bad faith. They claimed that Bank of Uganda sold the bank's assets at undervalue, including Plot 30 Kampala Road and Plot 66 William Street, and improperly consolidated and disposed of assets of seventeen companies associated with the bank. The respondents sought declarations, orders for accounting, compensation, and damages. The applicants moved to strike out the plaint on grounds of limitation, res judicata, lack of locus standi, and that the suit was frivolous and vexatious. The respondents contended their cause of action arose from discovery of fraud through a 2019 COSASE report and that the liquidation remained ongoing.

Issues

  1. Whether the respondents have locus standi to bring claims in respect of seventeen corporate entities associated with the second applicant.
  2. Whether the claim in respect of Plot 30 Kampala Road is barred by res judicata.
  3. Whether the respondents' claims are barred by limitation under the Limitation Act.
  4. Whether the doctrine of laches bars the respondents' claims for declaratory orders.
  5. Whether the fraud exception to limitation applies to toll time in favour of the respondents.

Orders

  • The preliminary objection regarding the respondents' claim in respect of the seventeen corporate entities associated with the second applicant is sustained and that aspect of the claim is struck out.
  • The preliminary objection that the claim regarding Plot 30 Kampala Road is barred by res judicata is overruled.
  • The preliminary objections based on limitation are overruled.
  • The costs of the application shall abide the outcome of the suit.

Rules and key headnotes

Company Law — Derivative Actions — Locus Standi of Shareholders — Wrongs to Associated Companies
Only the company, not its members, can sue for wrongs done to the company. Where a wrong has been done to a company, individual shareholders are not able to sue for losses which are merely derivative or reflective. For a minority shareholder to succeed in being permitted to bring a derivative suit, that minority shareholder must first be granted leave by the Court and must demonstrate that a wrong has been done to the company whilst under the control of the wrongdoers, from which the wrongdoers have benefited, there is no other way of remedying this state of affairs, and the action is reasonable, prudent and in the interests of the company.
Company Law — Liquidators — Fiduciary Duties — Duties Owed to Shareholders and Creditors
A liquidator occupies a position of trust in relation to the company in liquidation and owes fiduciary duties to both contributories and creditors. Directors and liquidators do not, solely by virtue of their office, owe fiduciary duties to the shareholders collectively or individually. The fiduciary duties owed to the company arise from the legal relationship between the liquidator and the company, but fiduciary duties owed to shareholders are dependent on establishing a special factual relationship between the liquidator and the shareholders in the particular case.
Civil Procedure — Res Judicata — Same Matter Directly and Substantially in Issue
For the doctrine of res judicata to apply, the matter must have been directly and substantially in issue in the former suit. The expression 'directly and substantially in issue' is used in contradistinction to 'incidentally or collaterally in issue'. Where a claim concerns events alleged to have occurred after the execution of a consent judgment and relates to its execution, and the facts and questions now being raised were never actually litigated and determined in the prior suit and could not have been made a ground of attack or defence in the previous suit, the doctrine of res judicata does not apply.
Civil Procedure — Preliminary Objections — Points of Law versus Questions of Fact
A preliminary objection must raise a point of law based on ascertained facts and not evidence. It should be a matter that is capable of determination based only on examination of the pleadings without reference to any evidence. Where the actual date of accrual of a cause of action is contested and establishing the actual dates of alleged illegal or wrongful conduct is a prerequisite to determination of when the cause of action accrued, it is a matter that cannot be determined without hearing or reference to evidence, and therefore cannot be decided as a preliminary point of law.
Civil Procedure — Limitation — Declaratory Judgments — Application of Limitation Periods by Analogy
Under the Limitation Act, there is no limitation period specifically directed at a suit for declaratory judgment. A relief by way of a declaration is not founded on tort or contract but is a cause of action in itself akin to specific performance, injunction or other equitable relief. However, where consequential relief is sought in addition to the declaration, and the Court determines that the underlying dispute could have been resolved through another proceeding for which a specific limitation period is statutorily provided, the Court will apply that limitation period.
Civil Procedure — Limitation — Fraud Exception — Discovery of Fraud
Where a suit is based upon the fraud of the defendant or his agent, the period of limitation does not begin to run until the plaintiff has discovered the fraud or could with reasonable diligence have discovered it. Determination of when the party pleading this exception could with reasonable diligence have discovered the illegal or wrongful act constituting the cause of action is a question of fact which may be decided only after hearing evidence and is a fact intensive inquiry into the conduct and background of both parties. It cannot be determined as a preliminary point of law that this exception is not available to a plaintiff.
Civil Procedure — Pleadings — Exemption from Limitation — Substantive Justice
Where a suit is instituted after the expiration of the period prescribed by the law of limitation, the plaint should show the grounds upon which the exemption from that law is claimed. Although a plaintiff may not expressly state reliance on an exemption, if the factual grounds upon which the exemption may be claimed are pleaded as required, the failure to include a conclusory statement of such reliance is not fatal to the claim under the substantive justice doctrine, unless it is clear that there are no set of facts that the plaintiff could prove to establish the claim.

Legislation cited (17)

Cases cited (43)

  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696
  • Attorney General v Major General David Tinyefunza (Constitutional Appeal No. 1 of 1997)
  • Njau and others v City Council of Nairobi [1976-1985] 1 EA 397
  • Percival v Wright [1902] 2 Ch 421
  • Peskin v Anderson [2000] 2 BCLC 1
  • Salomon v A Salomon & Co Ltd [1897] AC 22
  • Foss v Harbottle (1843) 2 Hare 461
  • Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204
  • Stein v Blake [1998] 1 All ER 724
  • Edwards v Halliwell [1950] 2 All ER 1064
  • Rai and others v Rai and others [2002] 2 EA 537
  • Estmanco (Kilner House) v Greater London Council [1982] 1 All ER 437
  • Fang Min v Uganda Hui Neng Mining Ltd and five others (Civil Suit No. 318 of 2016)
  • Kagurusi Remmy Nowiitu and another v Baguma Cyprian Begumanya and two others (Civil Suit No. 392 of 2014)
  • Johnson v Gore Wood & Co [2001] 1 All ER 481
  • Oldham and others v Georgina Kyrris and another [2003] EWCA Civ 1506
  • Grand Gain Investment Ltd v Cosimo Borrelli [2006] HKCU 872
  • Hague v Nam Tai Electronics Inc and others [2008] UKPC 13
  • White v Jones [1995] 2 AC 207
  • Re Hill's Waterfall Estate and Goldmining Co [1896] 1 Ch 947
  • Coleman v Myers [1977] 2 NZLR 225
  • Brunninghausen v Glavanics [1999] 46 NSWLR 538
  • Allen v Hyatt (1914) 30 TLR 444
  • Peskin v Anderson [2001] 1 BCLC 372
  • Howard Smith Limited v Ampol Petroleum Limited [1974] AC 821
  • In the Matter of Mwariki Farmers Company Limited v Companies Act Section 339 and others [2007] 2 EA 185
  • Ganatra v Ganatra [2007] 1 EA 76
  • Karia and another v Attorney-General and others [2005] 1 EA 83
  • Federated Dept Stores v Moitie 452 US 394 (1981)
  • Birkett v James [1977] 2 All ER 801
  • Dhanesvar V Mehta v Manilal M Shah [1965] EA 321
  • Rawal v Rawal [1990] KLR 275
  • Iga v Makerere University [1972] EA 65
  • Re-Application of Mustapha Ramathan (1996) KALR 86
  • Hilton v Sutton Steam Laundry [1946] 1 KB 61
  • Western Highland Creameries Ltd and another v Stanbic Bank Uganda Ltd and two others (Civil Suit No. 462 of 2011)
  • Knox v Gye (1872) LR 5 HL 656
  • Couthard v Disco Mix Ltd [2001] 1 WLR 707
  • Companhia De Seguros Imperio v Heath (REBX) Ltd and others [2001] 1 WLR 112
  • Guaranty Trust Company of New York v Hannay and Company Limited [1915] 2 KB 536
  • Gouriet v Union of Post Office Workers and others [1977] 3 All ER 70
  • Uganda Railways Corporation v Ekwaru DO and 5104 others (Civil Appeal No. 185 of 2007)
  • Murome Sayikwo v Kuko Yovan and another [1985] HCB 68

Cases citing this judgment (12)

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

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Bank of Uganda and Another v Kaweesi and Others (Miscellaneous Application 1047 of 2022) [2023] UGCommC 47 (17 January 2023)
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.