Wakilii

Centenary Rural Development Bank Limited v Namulondo Hasifa and Others (Civil Suit No. 355 of 2023)

High Court · [2026] UGCOMMC 77 · 2026 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of banking facility agreement and professional negligence in property valuation
Decision
Judgment entered for the plaintiff against the 2nd defendant and ex parte against the 3rd defendant for professional negligence and breach of retainer agreement

Observed later treatment

No later-treatment classification is recorded for this judgment.

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.

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

Held that the 2nd and 3rd defendants, professional valuers and surveyors, owed a duty of care to the plaintiff bank and breached that duty by valuing the wrong property, resulting in a valuation report that misrepresented vacant land as developed with a double-storied residential building. The valuers' reliance on an agent who valued the wrong property did not exonerate them under the principle qui facit per alium facit per se. The bank's failure to conduct periodic reviews as recommended in the valuation report did not constitute contributory negligence where the report gave positive remarks about the property and did not specify review timelines or condition disbursement on a resurvey. The defendants were jointly and severally liable for the outstanding loan amount, interest, and general damages.

Outcome

Judgment entered for the plaintiff against the 2nd defendant and ex parte against the 3rd defendant for professional negligence and breach of retainer agreement

Facts

The plaintiff bank advanced a loan of UGX 350,000,000 to the 1st defendant to purchase land comprised in Plot 118, Block 260, Ziranumba, Kyadondo, Wakiso District. Prior to disbursement, the plaintiff engaged the 2nd and 3rd defendants, professional valuers and surveyors trading as M/S Katuramu & Company Consulting Surveyors and Valuers, to value the property. The valuers presented a report dated 27th October 2021 indicating the property was developed with a double-storied residential house with an Open Market Value of UGX 770,000,000 and a Forced Sale Value of UGX 500,000,000. Based on this report, the plaintiff advanced the loan. The 1st defendant defaulted on loan instalments. When the plaintiff commenced foreclosure proceedings and instructed another firm to open boundaries, it was discovered that the property was vacant land used for subsistence farming, not developed as represented in the valuation report. The 2nd defendant claimed his agent, Kakaire James, had conducted the valuation and confirmed the site inspection was done in the presence of the bank's loan officer, but admitted the agent valued the wrong property.

Issues

  1. Whether the 1st defendant breached the banking facility agreement dated 3rd December 2021?
  2. Whether the 2nd and 3rd defendants are liable for professional negligence in as far as the valuation report dated 27th October 2021 and addressed to the plaintiff is concerned?
  3. What remedies are available to the parties?

Orders

  • A declaration that the 2nd and 3rd defendants breached the Valuers/Surveyors retainer agreement dated 27th August 2019.
  • A declaration that the 2nd and 3rd defendants were professionally negligent in their findings as contained in the valuation report dated 27th October 2021 addressed to the plaintiff.
  • An order that the defendants are jointly and severally liable to pay a sum of UGX 471,963,606/= to the plaintiff.
  • An order that the defendants are jointly and severally liable to pay interest on the outstanding sum at the rate of 20% per annum from the date of filing the suit until payment in full.
  • An order that the defendants are jointly and severally liable to pay general damages of UGX 50,000,000/= to the plaintiff for breach of contract.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Professional Negligence — Duty of Care — Valuers and Surveyors — Relationship with Bank
The relationship between a valuer and the bank that appoints him is that of a professional and a layman. Where a person possessing special skill undertakes to apply that skill for the assistance of another person who relies upon such skill, a duty of care arises, and if the person takes it upon himself to give information or advice which he knows or should know will be relied upon, a duty of care will arise.
Professional Negligence — Breach of Duty — Standard of Care — Valuers and Surveyors
A valuer or surveyor who, presented with a copy of the certificate of title and deed plan, fails to discover that there is a variance between the property being surveyed and that which appears on the title, falls below the standard of the ordinary skilled valuer or surveyor exercising and professing to have that special skill, and in the absence of fraud, such conduct imputes negligence.
Professional Negligence — Vicarious Liability — Principal and Agent — Qui Facit Per Alium Facit Per Se
Under the principle qui facit per alium facit per se (he who acts through another acts himself), where a person delegates a task or duty to another, whether called an agent or independent contractor, the employer will be liable for the negligence of that other person in the performance of the task. A valuer who relies on an agent to conduct a valuation is deemed to have been involved by virtue of the agent's conduct and is not exonerated from liability for the agent's negligence.
Professional Negligence — Contributory Negligence — Bank's Duty to Review Valuation Report
Where a valuation report recommends periodic reviews of property value due to external factors such as the Covid-19 pandemic but does not specify timelines for such reviews, does not state that a review must occur prior to loan disbursement, and gives positive remarks about the property's suitability for mortgage purposes, a bank's failure to conduct a review within a short period (two months) between the report and loan disbursement does not constitute contributory negligence. A layman bank cannot be blamed for not conducting a review where the professional valuer did not prescribe the period for review.
Mortgage Lending — Reliance on Valuation Reports — Bank's Internal Risk Management
Where a bank has no internal staff to carry out property valuations and has relied on a valuation firm's services for a period of ten years, and the bank clearly states in the instruction letter that the purpose of the valuation is to facilitate advancement of a loan facility, the bank significantly relies on the skills and expertise of the valuers, and it is through this reliance that the duty of care arises.
General Damages — Assessment — Professional Negligence by Valuers
In assessing general damages for professional negligence by valuers, courts are guided by the value of the subject matter, the economic inconvenience that the party was put through at the instance of the opposite party, and the nature and extent of the breach. Where a bank has been deprived of its money due to a valuer's negligence and the defendants failed to mitigate such negligence, an award of general damages is justifiable.
Interest — Rate — Banking Institutions — Deprivation of Use of Funds
Where a financial institution providing credit services to the public has been deprived of the opportunity to use an outstanding amount to offer loans and obtain revenue in the form of interest, an award of interest at a rate close to the institution's prime lending rate (20% per annum where the prime rate was 19.5%) from the date of filing suit until payment in full is adequate.

Legislation cited (5)

Cases cited (15)

  • Donoghue v Stevenson (1932) AC 362
  • KCB Bank Uganda Limited v Sendagire Joseph and Others (High Court Civil Suit No. 640 of 2013)
  • Blyth v Birmingham Waterworks (1856) Exch 781
  • Baxter v FW Gapp & Co Limited [1938] 4 All ER 457
  • Stanbic Bank (U) Limited v Tuka Investments Limited and 4 Others (Civil Suit No. 464 of 2013)
  • Hedley Byrne & Co Limited v Heller & Partners Limited [1964] AC 465
  • Oil Energy 25 Ltd v Komakech Robert (High Court Civil Appeal No. 111 of 2019)
  • Watsemwa and Another v Attorney General (Civil Suit No. 675 of 2006)
  • Bolam v Friern Hospital Management Committee [1957] 2 All ER 118
  • Uganda Commercial Bank v Deo Kigozi (Court of Appeal Civil Appeal No. 21 of 1999)
  • Attorney General v Uganda Law Society (Constitutional Appeal No. 1 of 2006)
  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Robert Cuossens v Attorney General (Supreme Court Civil Appeal No. 8 of 1999)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Uganda Development Bank v Muganga Construction Co Ltd [1981] HB 35

Full judgment

↓ Download PDF

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

Centenary Rural Development Bank Limited v Namulondo Hasifa and Others (Civil Suit No. 355 of 2023) [2026] UGCommC 77 (2 March 2026)
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.