Stanbic Bank (U) Limited v Uganda Crocs Limited (Civil Appeal No. 47 of 2003)

Observed later treatment

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.

Holding

The Court of Appeal dismissed the bank's appeal, upholding the High Court's finding that the signatures purportedly introducing Susan Bristow as a signatory were forged and that she was never a duly authorised signatory to the company's accounts. The bank acted irregularly and negligently by permitting operation of the accounts on unauthenticated, altered mandate documents securely held by it as banker. The suit was not time-barred under section 26 of the Limitation Act as time ran from discovery of fraud through a police report. Under sections 100 and 102 of the Evidence Act the bank bore the burden of proving payments discharged the company's liabilities, which it failed to do.

Outcome

Appeal dismissed; High Court judgment against the bank upheld with costs to the respondent

Facts

Uganda Crocs Limited opened US dollar and Uganda shilling accounts with the appellant bank in 1991 for a crocodile-rearing project. Dr. Alex Babitunga, the sole resident director, was authorised to operate the accounts according to mandates. After changes in signatories were properly communicated, a dispute arose over a specimen signature card purportedly issued to Susan Margaret Howard Bristow bearing the word "ALONE" and a backdated signature of Dr. Babitunga dated 30.12.1991, whereas Babitunga had died on 9 February 1992. Cancellations altering "any two to sign" to "any one to sign" appeared on cards without authentication or bank stamps. The company alleged fraudulent change of mandate allowing an unauthorised signatory to withdraw large sums. It reported the matter to police, whose investigation revealed the anomalies. The bank denied liability, contending Babitunga had authorised Susan before his death. The High Court found the signatures forged and the bank negligent, awarding US$345,444.64 and UGX 181,373,893. The bank appealed.

Issues

1. Whether the specimen signature card and letter introducing Susan Bristow as a signatory bore forged signatures of the deceased director Dr. Alex Babitunga.
2. Whether Susan Bristow was a duly authorised signatory to the respondent company's bank accounts.
3. Whether the appellant bank was negligent in permitting operation of the accounts on unauthenticated and altered mandate documents.
4. Whether the respondent's suit was barred by limitation.
5. Whether the amounts awarded were properly drawn while Susan Bristow's impugned signature was being honoured.
6. Whether the burden lay on the bank to prove payments went to the respondent's creditors or benefit.

Orders

• Appeal dismissed.
• Costs to the respondent here and in the court below.

Rules and key headnotes

Legislation cited (4)

• Limitation Act (Cap 70) s.26
• Evidence Act s.100
• Evidence Act s.102
• Rules of the Court of Appeal r.29(1)(a)

Cases cited (4)

• Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
• Tesco Supermarkets Ltd v Nattrass [1972] AC 153
• Barclays Bank of Uganda v Godfrey Mubiru (Supreme Court Civil Appeal No. 1 of 1998)
• Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80

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.

• Stanbic Bank Uganda Ltd v Uganda Crocs Limited (Civil Appeal 4 of 2004)

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