Wakilii

Osikol (Suing through Kabagambe, his Lawful Attorney) v Mutebi (Civil Suit 640 of 2022)

High Court · [2024] UGCOMMC 362 · 2024 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of loan principal and interest
Decision
Judgment entered for plaintiff with special damages, general damages, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where an agent signs a loan agreement on behalf of a principal and the borrower is aware of the agency relationship, the principal has locus standi to sue for breach even if formal power of attorney was executed after the loan agreement. The court found the defendant indebted to the plaintiff for UGX 70,000,000 advanced through the agent. The agreed interest rate of 6% per month (72% per annum) was held harsh and unconscionable for a friendly loan and reduced to 2% per month (24% per annum). Electronic evidence lacking authentication, including undated phone recordings, was rejected.

Outcome

Judgment entered for plaintiff with special damages, general damages, interest, and costs

Facts

On 4 January 2021, the plaintiff through his agent Kabagambe Mathias entered into a loan agreement with the defendant to advance UGX 70,000,000 in two instalments (UGX 27,500,000 and UGX 42,500,000) at 6% interest per month, repayable in six months, with the defendant's land pledged as security. The plaintiff contended that the first instalment was paid on 4 January 2021 and the balance on 8 January 2021. The defendant admitted receiving UGX 45,000,000 from Kabagambe Mathias (UGX 2,500,000 on 6 January and UGX 42,500,000 on 8 January) but denied receiving the first instalment of UGX 27,500,000, claiming the loan agreement was with Kabagambe Mathias personally, not the plaintiff. The defendant deposited his certificate of title and an equitable mortgage was registered. The defendant defaulted on repayment. A power of attorney authorising Kabagambe Mathias to sue on behalf of the plaintiff was executed on 2 November 2021.

Issues

  1. Whether the defendant is indebted to the plaintiff.
  2. What remedies are available to the parties.

Orders

  • The defendant is indebted to the plaintiff in the sum of UGX 70,000,000.
  • The preliminary objection that the suit is a nullity is overruled.
  • Special damages of UGX 70,000,000 awarded to the plaintiff.
  • Interest awarded at 2% per month (24% per annum) on the principal sum from the date the loan fell due until payment in full.
  • General damages of UGX 5,000,000 awarded to the plaintiff.
  • Costs of the suit awarded to the plaintiff.
  • Interest on the aggregate sum at 6% per annum from the date of judgment until payment in full.

Rules and key headnotes

Agency — Authority of Agent — Express and Implied Authority
The authority of an agent to act on behalf of a principal may be express (given by spoken or written words) or implied (inferred from the circumstances). Where a loan agreement is signed by an agent on behalf of a named principal and the third party is aware of the agency relationship, the authority to contract as agent can be inferred from the circumstances even in the absence of a contemporaneous written power of attorney.
Agency — Principal's Locus Standi — Enforcement of Contract by Principal
A principal has locus standi to sue on a contract entered into by his agent on his behalf where the agent's authority is established and the third party was aware of the agency relationship at the time of contracting. A power of attorney executed after the contract to authorise the agent to sue does not vitiate the principal's right to enforce the contract.
Scheduling Conference — Preliminary Objections — Failure to Schedule Point of Law
Where a party raises a preliminary objection in the defence but fails to ensure it is scheduled as an issue during the scheduling conference when expressly asked whether there are points of law to be addressed, the court may nevertheless determine the point if it appears in the pleadings and submissions, though the party had a duty to court to ensure proper scheduling.
Electronic Evidence — Authentication — Integrity Requirements
Before electronic evidence such as phone recordings is admitted and evidential value attached, the party tendering it must prove its authenticity by establishing that it has integrity (complete and unaltered), is capable of being displayed, and the burden of proof lies on the party seeking to introduce it. Where the tendering party cannot state when the recording was made, what phone number was used, what device was used, or whether the recording was tampered with, and the recording bears no date, it must be rejected.
Interest Rates — Harsh and Unconscionable Interest — Friendly Loans
An interest rate of 6% per month (72% per annum) on a friendly loan between individuals where the lender is not a licensed money lender is harsh and unconscionable and ought not to be enforced by legal process. Courts may reduce such interest to a just rate, and for friendly loans the rate should be lower than that charged by licensed money lenders. An interest rate of 2% per month (24% per annum) may be just for a friendly loan.
Witness Credibility — Inconsistent Testimony
A witness who in an earlier sworn statement denies owing any money to a person, but in subsequent proceedings admits owing that same person money while claiming to owe a different party, is dishonest and unreliable. Courts may reject the evidence of such a witness.
General Damages — Breach of Contract — Assessment
In assessing general damages for breach of contract, the court considers the value of the subject matter, the economic inconvenience suffered, and the nature and extent of injury. A plaintiff kept out of use of money from 2021 which could have been used for development purposes, and whose agent was dragged to court, may be awarded general damages to restore him to the position he would have been in had the breach not occurred.

Legislation cited (11)

Cases cited (8)

  • Tororo Cement Co Ltd v Frokina International Ltd (Supreme Court Civil Appeal No. 02 of 2001)
  • W.M Kyambadde v Mpigi District Administration IIe84lHCB
  • Damalie Byakusaaga Bisobye v Byakusaaga Bisobye Sebulime Bokoso & Anor (High Court Miscellaneous Application No. 1295 of 2023)
  • Hadley v Baxendale (1854) 9 Exch 341
  • Robert Cuossens v Attorney General (Supreme Court Civil Appeal No. 8 of 1999)
  • Uganda Commercial Bank v Kigozi [2002] EA 305
  • Jennifer Behange, Rwanyindo Aurelia, Paul Bagenzi v School Outfitter (U) Ltd (Court of Appeal Civil Appeal No. 53 of 1999)
  • Kinyera v The Management Committee of Laroo Building Primary School (High Court Civil Suit No. 099 of 2013)

Full judgment

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

Osikol (Suing through Kabagambe, his Lawful Attorney) v Mutebi (Civil Suit 640 of 2022) [2024] UGCommC 362 (28 October 2024)
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.