Wakilii

Liberty Life Assurance (U) Ltd v Joseryn Kyosimire and Another (Civil Appeal 7 of 2024)

High Court · [2026] UGHC 163 · 2026 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from Chief Magistrate's Court judgment in a suit concerning an agricultural loan insurance claim
Decision
Appeal allowed; lower court orders set aside; 1st respondent declared not to owe 2nd respondent any money on the agricultural loan; 2nd respondent held responsible for costs

Observed later treatment

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Holding

The High Court allowed the appeal, holding that no cause of action was established against the appellant insurer because no insurance policy for 2019 (when the loss occurred) was proved on record, despite the 1st respondent having paid insurance premiums. The court held the 2nd respondent bank responsible for failing to provide insurance documentation to its client and for its undertaking that insurance would cover the loan in event of loss. The 1st respondent was declared not to owe the 2nd respondent any money on the agricultural loan.

Outcome

Appeal allowed; lower court orders set aside; 1st respondent declared not to owe 2nd respondent any money on the agricultural loan; 2nd respondent held responsible for costs

Facts

The 1st respondent obtained an agricultural loan of UGX 15,000,000 from the 2nd respondent bank in 2019, with 1.75% deducted as insurance fees. In September 2019, heavy storms destroyed her banana plantation. The 2nd respondent assured her she would be compensated by the appellant insurer. The appellant paid only UGX 1,488,142 (representing 19.4% assessed loss) to the 2nd respondent. The 2nd respondent continued charging interest and threatened to attach security. The 1st respondent sued seeking a declaration that she owed no money and an injunction against sale of her land. The trial court found partial loss but ordered the appellant to fully indemnify the 2nd respondent for the outstanding loan balance of UGX 7,670,833. The appellant appealed, arguing no valid insurance policy for 2019 was proved on record.

Issues

  1. Whether the plaintiff has a cause of action against the defendants.
  2. Whether the appellant should compensate and indemnify the 2nd respondent under the insurance policy.
  3. Whether the appellant owed the 2nd respondent the entire balance of the loan and interest.
  4. Whether costs were properly awarded to the 1st respondent.

Orders

  • Appeal allowed.
  • The 1st respondent does not owe the 2nd respondent any money on the agricultural loan agreement executed on 19th September 2019 that was exhibited as DEX1.
  • The 2nd respondent shall pay the 1st respondent's costs in the lower suit and counter claim.
  • The 2nd respondent shall pay the appellant's costs in the lower court and in this appellate court.
  • Orders of the lower court set aside.

Rules and key headnotes

Insurance — Cause of Action — Proof of Valid Insurance Contract
A cause of action in an insurance claim requires proof of a valid and operative contract of insurance for the period when the insured event occurred, including ascertainment of parties, agreement on subject matter, fixed period of insurance, and agreement on sum insured and premium.
Evidence — Documentary Evidence — Insurance Policies — Temporal Relevance
Where an insured event occurred in 2019 but the only insurance policies adduced in evidence relate to periods in 2020 and 2021, the evidence does not establish a cause of action for the 2019 loss, and the court cannot order indemnity based on policies outside the relevant period.
Banking — Consumer Protection — Duty of Transparency — Insurance Documentation
A financial services provider that collects insurance premiums from loan clients has a duty under the Bank of Uganda Financial Consumer Protection Guidelines to provide clients with all documentation including insurance policies or arrangement agreements with insurers, to enable clients to understand the nature and extent of their insurance cover.
Contract Law — Undertakings — Bank Liability for Representations
Where a bank collects insurance premiums from a borrower and undertakes that insurance will pay the entire loan in event of loss, but fails to provide any insurance policy documentation for the relevant period, the bank may be held responsible for its undertakings to the borrower.
Insurance — Premium Payment — Inception of Cover
Under the Insurance Act section 62(1), where an insured pays the premium in full on or before the date of inception of the policy, the insurance cover commences from that date, and the insurer's liability is determined by the policy in force at the time of the insured event.

Legislation cited (8)

Cases cited (5)

Full judgment

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

Liberty Life Assurance (U) Ltd v Joseryn Kyosimire and Another (Civil Appeal 7 of 2024) [2026] UGHC 163 (27 February 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.