Wakilii

Mateete Microfinance Cooperative Trust Limited v Kibuye and 3 Others (Civil Suit No. 52 of 2017)

High Court · [2021] UGHCCD 229 · 2021 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money defrauded by employees; proceedings against 1st and 3rd defendants (2nd and 4th defendants settled by consent)
Decision
Suit succeeded. Judgment entered for the Plaintiff with the 1st and 3rd Defendants held jointly and severally liable for the amounts defrauded plus general and exemplary damages.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the 1st defendant defrauded the plaintiff microfinance institution of over UGX 50 million through counterfeit deposits and misappropriation of customer funds. The court found that the 3rd defendant's guarantee agreement was not limited to the 1st defendant's initial position as cashier but covered his entire employment. The guarantee was enforceable throughout the 1st defendant's employment with the plaintiff. Oral evidence cannot vary the terms of a written guarantee agreement under the parole evidence rule. The 1st and 3rd defendants were held jointly and severally liable for the amounts defrauded.

Outcome

Suit succeeded. Judgment entered for the Plaintiff with the 1st and 3rd Defendants held jointly and severally liable for the amounts defrauded plus general and exemplary damages.

Facts

The plaintiff microfinance institution employed the 1st defendant as a branch manager at its Kinoni Branch. Between August and December 2015, the 1st defendant, in conspiracy with the 2nd defendant (another employee), defrauded the plaintiff through counterfeit deposits, falsely reporting deposits that were never made, and withdrawing the credited amounts. The 1st defendant also misappropriated funds from customer accounts including fixed deposits and loan proceeds. An audit conducted by Shore Partners in March 2016 revealed fraudulent transactions totaling over UGX 50 million. The 1st defendant absconded and did not defend the suit. The 3rd defendant, the 1st defendant's mother, had signed a guarantee agreement on 15 December 2009 undertaking to make good any losses caused by fraud. The 2nd and 4th defendants (also a guarantor) settled by consent. The case proceeded against the 1st and 3rd defendants only.

Issues

  1. Whether the 1st and 2nd defendants defrauded the plaintiff of Ug. Shs. 25,000,000
  2. Whether the 1st defendant made counterfeit deposits to his account and caused the plaintiff a loss of UGX 16,150,000
  3. Whether the 1st defendant unlawfully caused the disappearance of UGX 6,200,000 deposited by the plaintiff's customers as fixed deposits
  4. Whether the 1st defendant caused the disappearance of UGX 2,986,700 connected to loans advanced to the plaintiff's customers
  5. Whether the 3rd defendant's guarantee was only limited to the 1st defendant's appointment as cashier

Orders

  • The 1st and 3rd Defendants jointly and severally pay the Plaintiff UGX 11,331,500 that was defrauded by the 1st Defendant.
  • The 1st and 3rd Defendants jointly and severally pay to the Plaintiff UGX 16,150,000 that was wrongly deposited by the 1st Defendant on his account and thereafter withdrawn.
  • The 1st and 3rd Defendants jointly and severally pay to the Plaintiff UGX 6,780,000 that was misappropriated by the 1st Defendant from the Plaintiff's customers' fixed deposits.
  • The 1st and 3rd Defendants jointly and severally pay to the Plaintiff UGX 2,986,700 being money defrauded by the 1st Defendant having been loans intended for two of the Plaintiff's clients.
  • General damages of UGX 5,000,000 to be paid by the 1st Defendant.
  • Exemplary damages of UGX 5,000,000 to be paid by the 1st Defendant.
  • Costs of the suit are awarded to the Plaintiff to be paid jointly and severally by the 1st and 3rd Defendants.

Rules and key headnotes

Evidence — Admissions — Effect of Failure to File Defence — Order 8 Rule 3 Civil Procedure Rules
Where a defendant fails to file a defence or any reply to deny the allegations in a plaint, the court shall take every allegation in the plaint, if not specifically or by necessary implication denied, to be admitted.
Evidence — Cross-examination — Failure to Challenge Evidence in Chief — Effect
An omission or neglect to challenge the evidence in chief on a material or essential point by cross-examination leads to the inference that the evidence is accepted, subject to its being assailed as inherently incredible or probably untrue.
Evidence — Agreed Documents — Effect of Admission in Scheduling Memorandum
Where parties file a joint scheduling memorandum and a document is included among the agreed documents, that document becomes part of the evidence on record and may be relied upon by the court.
Contract Law — Guarantee — Scope and Enforceability — Construction of Guarantee Agreement
A contract of guarantee that does not specify a particular position or office is construed as covering the entire period of the principal's employment. The guarantor's obligation is not limited to a specific role unless expressly stated in the guarantee agreement.
Evidence — Parol Evidence Rule — Sections 91 and 92 Evidence Act — Prohibition on Oral Evidence to Vary Written Contract
Where the terms of a contract have been reduced to writing, oral evidence cannot be adduced to vary, add to, or contradict the terms of the written document. The intention of the parties must be deduced from the written contract itself.
Commercial Law — Fraud — Definition and Elements — Microfinance Institutions
Fraud embraces all multifarious means which human ingenuity can devise to get advantage over another by false suggestions or by suppression of truth. It is always positive and intentional, involving acts that result in breach of legal or equitable duty causing damage to another.
Damages & Quantum — Exemplary Damages — Purpose and Rationale — Employee Fraud
Exemplary damages are awarded not to enrich the plaintiff but to punish the defendant and deter repetition of the conduct. The award must not be excessive and should not exceed what would likely have been imposed in criminal proceedings if the conduct were criminal.

Legislation cited (7)

Cases cited (19)

  • Fredrick J.K. Zaabwe v Orient Bank and 5 Others (Supreme Court Civil Appeal No. 4 of 2006)
  • Sheikh Mawanda and Another v Kobil Uganda Limited (High Court Civil Suit No. 350 of 2008)
  • AG V barangay [1976] HCB 48
  • Uganda Revenue Authority v Stephen Mabosi (Supreme Court Civil Appeal No. 26 of 1995)
  • Administrator General v Bwanika James and 9 Others (Supreme Court Civil Appeal No. 7 of 2003)
  • David Sejjaaka v Rebecca Musoke (Civil Appeal No. 12 of 1985)
  • Professor Oloka Onyango and Others v Attorney General (Constitutional Petition No. 6 of 2014)
  • James Sawoabiri and Fred Musisi v Uganda (Criminal Appeal No. 5 of 1990)
  • Tororo Cement v Frokina International Limited (Supreme Court Civil Appeal No. 2 of 2001)
  • Phillip vs. Ward [1956] I AU ER 874
  • 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)
  • Charles Acire v Myaana Engola (High Court Civil Suit No. 143 of 1993)
  • Kibimba Rice Limited v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • George Kiggundu v Attorney General (Civil Suit No. 386 of 2014)
  • Obongo vs Municipal Council of Kisumu [1971] EA 91
  • O'Connor Vs Hewiston [1979] Crim. LR 46, CA
  • Archer Brown [1985] QB 401
  • Bank of Uganda v Bank Arabe Espanol (Supreme Court Civil Appeal No. 8 of 1998)

Full judgment

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

Mateete Microfinance Cooperative Trust Limited v Kibuye and 3 Others (Civil Suit No. 52 of 2017) [2021] UGHCCD 229 (27 September 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.