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Bank of Uganda v Masaba and Others (Civil Appeal 23 of 1997; Civil Appeal 45 of 1997)

Court of Appeal · [1998] UGCA 47 · 1998 Appeals Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated civil appeals from two High Court judgments awarding damages for misrepresentation and breach of contract
Decision
Both appeals dismissed; High Court judgments for the respondents (including refund of deducted housing loans and damages) upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal dismissed the bank's consolidated appeals. It held that the Governor's circular offering a voluntary termination package, including an undertaking not to deduct housing loans, amounted to negligent misrepresentation actionable in tort under the Hedley Byrne principle, because the bank promised payments without first ascertaining their source. A binding contract had also formed by offer, acceptance and consideration (mutual surrender of employment rights), and was breached when the bank deducted the housing loans after the respondents had retired in reliance on the promise. The trial judges correctly assessed damages and the appellate court found no basis to interfere with the awards.

Outcome

Both appeals dismissed; High Court judgments for the respondents (including refund of deducted housing loans and damages) upheld

Facts

The Governor of the Bank of Uganda issued circulars in September and November 1994 offering employees a Voluntary Termination Scheme with an attractive compensation package. The November circular represented that the bank would not deduct housing loans from departing employees' compensation packages, instead converting them into legal mortgages repayable over a period to be agreed. Relying on these representations, the respondents, who were permanent and pensionable employees still years from retirement, applied to retire voluntarily. Their applications were accepted. However, on receiving their cheques the respondents found the bank had deducted the full housing loans, citing a Ministry of Finance ruling that retrenchees must settle all debts before departure. They were left with very little money and suffered severe hardship. The High Court found false representation and breach of contract and entered judgment for the respondents, including refund of the deducted loans and general and special damages. The bank appealed.

Issues

  1. Whether the circular complained of constituted false representations actionable at law.
  2. Whether there was a contract between the appellant and the respondents that the housing loans would not be deducted from their retirement benefits.
  3. Whether there was a breach of contract by the appellant.
  4. Whether the High Court awarded the correct amount of damages.

Orders

  • Appeals dismissed.
  • Costs to the respondents both in the Court of Appeal and in the High Court.

Rules and key headnotes

Negligent Misrepresentation — Special Relationship — Hedley Byrne Principle
A party who, professing special knowledge or skill, makes a representation intending to induce another to enter a contract owes a duty to take reasonable care that the representation is correct; where it is given negligently and induces reliance to the other's detriment, the maker is liable in damages even absent fraud or a concluded contract.
Formation — Offer, Acceptance and Consideration — Variation of Employment Terms
Where an employer offers a voluntary termination package and an employee accepts and acts upon it, a binding contract is formed; consideration consists in the mutual surrender of rights under the existing employment contract, and the employer cannot unilaterally alter the agreed terms after acceptance.
Estoppel — Promissory Estoppel — Evidence Act s.113
A promise intended to be binding, intended to be acted upon, and in fact acted upon is binding; this equitable principle is reflected in section 113 of the Evidence Act, which prevents a person who has caused another to believe and act upon a representation from denying its truth.
Certainty — Agreement to Agree — Distinction from May & Butcher
Where parties envisage two separate agreements, the completion and binding effect of the first concluded contract is not defeated merely because terms of a distinct second agreement (such as a mortgage) remain to be settled by future agreement.
Appellate Interference — Assessment of Damages
An appellate court will not reverse a trial judge's assessment of damages merely because it would have awarded a different sum; it must be satisfied that the judge applied a wrong principle of law or that the amount was so high or low as to be an entirely erroneous estimate.

Legislation cited (1)

Cases cited (14)

  • Patel v Lalji Makanji [1957] E.A. 314
  • Hedley Byrne & Co. Ltd vs Heller & Partners Ltd [1964] All.ER. 465
  • Esso Petroleum Co. Ltd vs Mardon [1976] 2 All.E.R. 5
  • Edwards v Skyways Ltd [1964] 1 WLR 349
  • Evans J. Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
  • Moschi vs Leo. Air Service Ltd [1972] 2 All.ER 392
  • May & Butcher vs R [1934] 2 KB
  • Mavania-Nkangi vs NHC [1972] HCB 37
  • Hughes v Metropolitan Railways (1877) 2 A.C. 439
  • High Trees Ltd [1947] KB 130
  • Flint v Lovell [1935] 1 KB 354
  • Currie & Others vs Misa (1873-75) 10 Exh.153
  • Doyle vs Olby (Ironmongers) Ltd
  • Okello-Okello vs Uganda National Examinations Board Civil Appeal No. ...

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Bank of Uganda v Masaba and Others (Civil Appeal 23 of 1997; Civil Appeal 45 of 1997) [1998] UGCA 47 (28 April 1998)
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.