Wakilii

KCB Bank Uganda Limited v Sendagire and Anor and UAP Insurance (U) Limited and Anor (Civil Suit No. 640 of 2013)

High Court · [2021] UGHC 47 · 2021 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract, professional negligence, and recovery of loan sum with third party proceedings for indemnity
Decision
Judgment entered against both defendants jointly and severally for the loan sum, general damages, interest and costs. Third party claim against insurer dismissed. No finding made against 2nd third party for lack of proper service.

Observed later treatment

Cited — treatment unverified cited in 1 (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 1 time with no adverse treatment recorded; not yet tested on the merits. 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

Held that the 2nd Defendant valuer was negligent in valuing a different property from the mortgaged land, falling outside the permissible margin of error and breaching his duty of care to the Plaintiff bank. The Plaintiff did not contribute to the negligence by relying on an experienced valuer. The 2nd Defendant could not escape liability by claiming reliance on a sub-contracted surveyor. The 1st third party insurer was not liable to indemnify the 2nd Defendant as the loss involved fraud, which was excluded from the professional indemnity policy.

Outcome

Judgment entered against both defendants jointly and severally for the loan sum, general damages, interest and costs. Third party claim against insurer dismissed. No finding made against 2nd third party for lack of proper service.

Facts

KCB Bank advanced a loan of UGX 300,000,000 to the 1st Defendant secured by land at Plot 8956 Block 185 Najjera. Before advancing the loan, the bank instructed the 2nd Defendant, an experienced valuer, to survey and value the property. The 2nd Defendant sub-contracted a surveyor, Paul Kintu, to open boundaries. The 2nd Defendant's report valued the property at UGX 650,000,000 (open market) and UGX 455,000,000 (forced sale), describing it as developed with a three-storey residential apartment and perimeter wall. Based on this report, the bank executed the mortgage. When the 1st Defendant defaulted, the bank engaged Knight Frank to re-value the property for purposes of realisation. Knight Frank found the land was undeveloped with a restricted sale value of only UGX 14,400,000 and open market value of UGX 24,000,000. The 2nd Defendant admitted in evidence that he had valued a different plot. The bank sued both defendants. Default judgment was entered against the 1st Defendant. The 2nd Defendant joined UAP Insurance as 1st third party under a professional indemnity policy and Paul Kintu as 2nd third party, seeking indemnity.

Issues

  1. Whether the 1st Defendant is liable for breach of contract entered into between the Plaintiff and the 1st Defendant
  2. Whether the 2nd Defendant was negligent while carrying out the valuation and survey on behalf of the Plaintiff and whether such negligence resulted into loss
  3. Whether the Plaintiff is liable for contributory negligence
  4. Whether the 2nd Defendant was professionally negligent while carrying out the valuation and survey on behalf of the Plaintiff
  5. Whether the 2nd Defendant is entitled to any indemnification from the 1st third party arising from the Plaintiff's claim against him

Orders

  • The 1st and 2nd Defendant to jointly pay the loan sum to the Plaintiff of UGX 398,201,669
  • The 1st and 2nd Defendant jointly pay general damages of UGX 50,000,000
  • Interest on the loan sum at a rate of 20% per annum from 25 May 2012 and on general damages at 6% per annum from date of judgment till payment in full
  • The counterclaim is dismissed with costs
  • The 1st and 2nd Defendant shall be liable to pay costs of the suit to the Plaintiff and 1st third party

Rules and key headnotes

Professional Negligence — Duty of Care — Valuers — Relationship with Client
Where a valuer possessing special skill undertakes to apply that skill for the assistance of a client who relies upon it, a duty of care arises irrespective of contract. If the valuer knows or should know that the client will place reliance on his information or advice, the duty of care is established.
Professional Negligence — Valuers — Standard of Care — Permissible Margin of Error
A valuation which falls outside the permissible margin of error brings into question the valuer's competence and the care with which he carried out his task. A valuer is not negligent merely because he adopts a method of valuation which is not the best, provided it is one acceptable to a reasonable body of opinion among valuers. However, valuing an entirely different property from that instructed is not a mere error of valuation but negligence.
Professional Negligence — Contributory Negligence — Client's Due Diligence
Where a client appoints an experienced professional valuer and relies on his expertise, the client does not contribute to negligence by failing to carry out independent due diligence or verification. The appointment of and reliance on a qualified expert constitutes due diligence by the client.
Professional Negligence — Delegation to Sub-Contractors — Liability
Where a professional delegates a task to another person, whether agent or independent contractor, the professional remains liable for the negligence of that other person in the performance of the task. A valuer cannot escape liability by claiming he relied on a sub-contracted surveyor; while he may recover from the sub-contractor, he cannot exonerate himself from the client's claims.
Professional Indemnity Insurance — Exclusion Clauses — Fraud
A professional indemnity insurance policy which excludes cover for claims brought about or contributed to by dishonest, fraudulent, criminal or malicious acts or omissions does not cover losses where fraud was an element contributing to the loss, even if the insured professional was not himself the primary fraudster.
General Damages — Assessment — Banking and Finance
In assessing general damages, courts are guided by the value of the subject matter and the economic inconvenience a party has suffered. A plaintiff who has suffered damage due to the wrongful act of the defendant must be put in a position as near as possible to where they would have been had they not suffered the wrong.

Legislation cited (1)

Cases cited (9)

  • Baxter v Gapp & Co Ltd [1938] 4 All ER 457
  • Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1995] 2 All ER 769
  • Caparo Industries PLC v Dickman [1990] AC 605
  • Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
  • Uganda Commercial Bank v Deo Kigozi (Court of Appeal Civil Appeal No. 21 of 1999)
  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Kibimba Rice Limited v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Uganda Revenue Authority v Stephen Mabosi (Supreme Court Civil Appeal No. 16 of 1995)
  • Superior Construction Ltd v Notay Engineering Ltd (High Court Civil Suit No. 24 of 1992)

Cases citing this judgment (1)

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

KCB Bank Uganda Limited v Sendagire and Anor and UAP Insurance (U) Limited and Anor (Civil Suit No. 640 of 2013) [2021] UGHC 47 (30 June 2021)
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.