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Cairo Bank Uganda v Nuwabiine & 4 Others (Civil Suit 854 of 2022)

High Court · [2024] UGCOMMC 257 · 2024 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of loan monies, breach of contract, fraud, and professional negligence
Decision
Judgment entered in favour of the Plaintiff against the 1st, 2nd, 3rd, and 5th Defendants for the full claim plus damages and costs. Claim against the 4th Defendant dismissed.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the 4th Defendant valuer was not negligent because the Plaintiff had already granted the loan before receiving the valuation report, and thus could not have relied upon it. The four conditions for liability for economic loss in negligence were examined, and the reliance requirement was not satisfied. Judgment was entered against the 1st, 2nd, 3rd, and 5th Defendants for UGX 1,110,119,534 plus contractual interest, general damages of UGX 50,000,000, and punitive damages of UGX 40,000,000 for breach of loan facility, fraud, and professional negligence.

Outcome

Judgment entered in favour of the Plaintiff against the 1st, 2nd, 3rd, and 5th Defendants for the full claim plus damages and costs. Claim against the 4th Defendant dismissed.

Facts

The 1st Defendant applied to the Plaintiff bank for a loan facility of UGX 1,000,000,000 and offered security in land titles. The Plaintiff instructed the 3rd Defendant to survey and value property, and later instructed the 4th Defendant to value additional properties. A loan was granted on 3rd October 2019 and a mortgage deed signed on 26th September 2019, with a variation executed on 30th October 2019. The 1st Defendant undertook to repay in 24 equal monthly instalments at 20% interest per annum with default interest of 6%. By 1st August 2022, the 1st and 2nd Defendants had defaulted and failed to provide genuine security, having presented forged Certificates of Title. The 4th Defendant's valuation report was submitted on 25th October 2019, after the loan and original mortgage had been executed. The 1st, 2nd, 3rd, and 5th Defendants did not file defences. The 4th Defendant defended, denying negligence and asserting the Plaintiff could not have relied on a report delivered after the loan was granted.

Issues

  1. Whether the 4th Defendant was negligent in the execution of its duties to the Plaintiff?
  2. What reliefs are available to the Plaintiff as against all the Defendants?

Orders

  • Judgment entered against the 1st, 2nd, 3rd, and 5th Defendants for UGX 1,110,119,534.
  • Interest at 26% per annum from 1st August 2022 until payment in full awarded against the 1st, 2nd, 3rd, and 5th Defendants.
  • General damages of UGX 50,000,000 awarded to the Plaintiff against the 1st, 2nd, 3rd, and 5th Defendants.
  • Punitive damages of UGX 40,000,000 awarded to the Plaintiff against the 1st, 2nd, 3rd, and 5th Defendants.
  • Costs of the suit awarded to the Plaintiff.

Rules and key headnotes

Tort Law — Professional Negligence — Duty of Care in Economic Loss
For a professional to be liable for economic loss arising from advice or information, four conditions must be met: a fiduciary relationship of trust and confidence must exist between the parties; the party preparing the advice must have voluntarily assumed the risk; there must have been reliance on the advice by the other party; and such reliance must have been reasonable in the circumstances.
Tort Law — Professional Negligence — Reliance on Professional Advice — Timing
Where a professional valuer submits a valuation report after a bank has already executed a loan agreement and mortgage deed, the bank cannot claim to have relied on that report in extending the loan facility, and thus the element of reliance necessary for professional negligence is not established.
Civil Procedure — Judgment in Default — Liquidated Demand Against Several Defendants
Under Order 9 rules 6 and 7 of the Civil Procedure Rules, where a plaint claims a liquidated demand and some defendants fail to file a defence, the court may pass judgment for any sum not exceeding the sum claimed together with interest at the rate specified, and execution may issue without prejudice to the plaintiff's right to proceed against defendants who have filed a defence.
Damages & Quantum — General Damages — Assessment Factors
General damages are awarded at the discretion of the court to restore the aggrieved person to the position they would have been in had the breach not occurred, and the court should be guided by the value of the subject matter, the economic inconvenience suffered, and the nature and extent of the injury.
Damages & Quantum — Punitive Damages — Purpose and Restraint
Punitive damages are awardable to punish egregious, highhanded, malicious, or oppressive conduct by a defendant, focusing on the defendant's misconduct rather than the plaintiff's loss, but they should be awarded with restraint and in exceptional cases because punishment ought to be confined to criminal law as much as possible.

Cases cited (2)

  • Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305

Full judgment

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

Cairo Bank Uganda v Nuwabiine & 4 Others (Civil Suit 854 of 2022) [2024] UGCommC 257 (20 August 2024)
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.