Wakilii

Stephen Warufu Biru and Another v Trust Constance and Another (Civil Suit 118 of 2022)

High Court · [2026] UGHCCD 25 · 2026 Judgment for Plaintiffs AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for negligence and breach of fiduciary duty arising from bank's failure to promptly release mortgaged land title after loan repayment
Decision
Judgment for plaintiffs with award of special damages of UGX 11,643,980 and general damages of UGX 290,000,000 plus interest and costs against the 2nd defendant bank

Observed later treatment

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Holding

Held that a bank owes a duty of care to promptly release mortgaged security upon full loan repayment under Mortgage Act s.13(1). Failure to do so constitutes negligence and breach of fiduciary duty. Where a bank's delay in releasing a land title after loan repayment causes a customer to collapse and suffer psychiatric injury including hypertensive stroke and post-traumatic stress disorder, the bank is liable in damages. The harm was reasonably foreseeable where the bank knew the customer had sold the property to a third party and was under financial strain during COVID-19. Pre-existing medical conditions do not break the chain of causation where the bank's breach was the immediate trigger of the injury.

Outcome

Judgment for plaintiffs with award of special damages of UGX 11,643,980 and general damages of UGX 290,000,000 plus interest and costs against the 2nd defendant bank

Facts

On 20 November 2018, the plaintiffs obtained a UGX 50,000,000 loan from Centenary Bank secured by the 1st plaintiff's land title. On 29 July 2020, they fully repaid the outstanding balance of UGX 20,527,008 after selling the mortgaged land to a third party during the COVID-19 pandemic. Despite prior assurances that the title would be promptly released, the bank delayed release from 29 July to 3 August 2020. The plaintiffs, who had travelled from Ishaka (over 300km away) with travel permits during COVID-19 restrictions, were repeatedly told to wait. On 3 August 2020, while waiting in the banking hall, the 1st plaintiff was informed the title was still encumbered and unavailable. He immediately collapsed, lost consciousness, and was rushed to Kampala Hospital where he went into a coma for two days. He was diagnosed with hypertensive stroke, ischemic infarct with seizure disorder, and later post-traumatic stress disorder. He had no prior history of seizures or epilepsy. The bank released the title on 7 August 2020, four days after the 1st plaintiff's collapse.

Issues

  1. Whether the defendants' acts or omissions of withholding the plaintiffs' title caused psychiatric injuries/trauma to the 1st plaintiff.
  2. Whether the 2nd defendant is liable for breach of a fiduciary duty by dishonoring the plaintiffs' request of surrendering their title.
  3. What remedies are available to the parties?

Orders

  • Judgment entered in favour of the plaintiffs.
  • Centenary Rural Development Bank Ltd shall pay special damages of UGX 11,643,980 to the plaintiffs.
  • Centenary Rural Development Bank Ltd shall pay interest of 25% per annum on special damages of UGX 11,643,980 from 11th May 2022 until full payment.
  • Centenary Rural Development Bank Ltd shall pay general damages of UGX 290,000,000 to the plaintiffs.
  • Centenary Rural Development Bank Ltd shall pay interest of 25% per annum on general damages of UGX 290,000,000 from the date of judgment until full payment.
  • Centenary Rural Development Bank Ltd shall pay the costs of the suit.

Rules and key headnotes

Banking Law — Duty of Care — Release of Security After Loan Repayment
A bank owes a duty of care to its customer to act in accordance with the lawful request of its customer in normal operation of the customer's account, including the prompt release of mortgaged security upon full repayment of a loan.
Mortgage Law — Statutory Duty to Release Mortgage — Mortgage Act s.13(1)
Under Mortgage Act s.13(1), upon payment of all money and performance of all obligations secured by a mortgage, the mortgagee shall at the request and cost of the mortgagor release the mortgage at any time, and failure to do so amounts to negligence, breach of contract, and breach of fiduciary duty entitling the customer to compensation for financial loss and mental agony.
Negligence — Psychiatric Injury — Foreseeability of Harm
Where a bank delays in releasing mortgaged security after full loan repayment and knows that the customer has sold the property to a third party and is under financial strain, it is reasonably foreseeable that the customer may suffer psychiatric injury from the shock of being told the title remains encumbered, and the bank is liable in negligence for such injury.
Negligence — Causation — Pre-existing Conditions
In negligence claims, a defendant who commits a wrong takes their victim as they find them; it is no answer to a claim for damages to say that the victim would have sustained no or less injury if they had not suffered from some pre-existing condition. Where the defendant's breach is the immediate trigger of the injury, the defendant is liable even if the victim had pre-existing medical vulnerabilities.
Negligence — Psychiatric Injury — Elements of Proof
To establish negligence involving psychiatric injury, three elements must be proved: first, that the event caused or materially contributed to the plaintiff's illness; second, that the illness was reasonably foreseen by the defendant as a natural and probable consequence of the breach of duty of care; and third, once the first two matters are established, the plaintiff is entitled to compensation for the damage suffered.
Special Damages — Strict Pleading and Proof
Special damages must be strictly pleaded and strictly proved. Only those items of special damages supported by documentary evidence such as receipts will be awarded.
General Damages — Psychiatric Injury and Loss of Earning Capacity
General damages are the direct, natural or probable consequence of the wrongful act complained of and include damages for pain, suffering, and inconvenience. Where a plaintiff suffers psychiatric injury including hypertensive stroke, post-traumatic stress disorder, anxiety disorders and panic attacks as a result of the defendant's negligence, and is no longer able to engage in productive business, substantial general damages are warranted.

Legislation cited (2)

Cases cited (7)

  • Stanbic Bank Uganda Ltd v Uganda Crocs Limited (Civil Appeal No. 4 of 2004)
  • De Rita v. 1266078 Ontario Inc., Court of Appeal for Ontario, Canada 2024 ONCA 460 (CanLII)
  • Attan Okia Moses v Ariko Herbert Edmund Okworo and Others (Election Petition Appeal No. 2 of 2023)
  • Rothwell v. Chemical & Insulating Co [2007] 4 ALL ER 1047
  • Brice and Others v. Brown and Others [1984] 1 ALL ER 997
  • Makubuya William v Umeme (U) Ltd (Civil Appeal No. 1 of 2019)
  • [2023] UGSC 58

Full judgment

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Stephen Warufu Biru and Another v Trust Constance and Another (Civil Suit 118 of 2022) [2026] UGHCCD 25 (28 January 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.