D.K Construction Co. Limited & Another v Barclays Bank Uganda Limited (Civil Suit 644 of 2000)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
The High Court lifted the corporate veil of two plaintiff companies, finding they were used as conduits by their managing director Lawrence Kasasa Kasekese to negotiate fraudulently diverted cheques from oil companies. The Court considered the proximity in time of incorporation, account opening, and the fraudulent transactions; the exact matching of cheque amounts; suspicious payments to employees of the defrauded companies; and the absence of prior trading records. The suit was dismissed and the defendant bank declared entitled to retain the disputed funds.
Outcome
Suit dismissed; defendant bank entitled to retain the funds
Facts
Two plaintiff companies incorporated in 1990 and 1991 opened bank accounts shortly before two oil companies (Total and Caltex) issued cheques totalling over Shs.170 million to Uganda Customs. The cheques never reached the payee but were diverted to an account held by Mapinto Enterprises, which had been blocked for fraud. Mapinto then issued cheques for identical amounts to the two plaintiff companies, who banked them. The plaintiffs' managing director Lawrence Kasasa Kasekese was a signatory to both accounts. Employees of Total and Caltex who handled outgoing Uganda Revenue Authority cheques received substantial payments from the first plaintiff. Criminal proceedings ensued; the accused were convicted but convictions were quashed on technical grounds. A trial magistrate ordered transfer of the remaining funds on the plaintiffs' accounts to the defendant bank in 1997. The DPP later withdrew charges. The plaintiff companies sued seeking declarations of beneficial ownership.
Issues
- Whether the money Shs.24,857,500/= belongs in law or equity to the first Plaintiff or the Defendant.
- Whether Ug. Shs.17,606,402/= belongs in law or equity to the second Plaintiff or the Defendant.
- Whether the veil of incorporation should be lifted in respect of the Plaintiffs and Lawrence Kasasa Kasekese.
Orders
- Suit dismissed with costs.
- Judgment entered for the Defendant on the counter-claim.
- Declaration that the Defendant is entitled to retain the money.
- Defendant to have the costs of the counter-claim.
Rules and key headnotes
Legislation cited (1)
Cases cited (1)
- Salomon v Salomon & Co Ltd [1897] AC 22
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.