Wills International Engineers and Contractors Limited and Another v DFCU (Civil Appeal No. 260 of 2017)

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

By majority, the Court of Appeal allowed the appeal against a bank that wrongfully registered mortgages on titles held only for safe custody and presented a forged stamp duty certificate. The majority held these deliberate acts amounted to fraud and a breach of fiduciary duty warranting substantial damages, not the nominal award made below. It further held that a successful party is entitled to costs absent misconduct, so the appellants should have received costs on the dismissed counter-claim. The court awarded UGX 80,000,000 per illegal mortgage per year and UGX 120,000,000 general damages with 12% interest. Musoke, JA dissented, finding no pleaded fraud and no proven loss.

Outcome

Appeal allowed by majority; judgment entered for the appellants with substantial damages, interest and costs; Musoke, JA dissenting

Facts

The first appellant, a bank customer whose managing director was the second appellant, obtained loans from the respondent bank secured by a mortgage on Block 265 Plot 7346. The certificate of title for Block 265 Plot 7347 was deposited with the bank only for safe custody. The respondent nonetheless registered mortgages on Plot 7347, entering encumbrances on both titles on the same day but with different signatures. The respondent also debited the second appellant's account with charges on an untaken loan and presented a stamp duty certificate to URA which a URA witness testified was not genuine. When the appellants sought to sell Plot 7347 to clear a loan, the encumbrances prevented sale despite a buyer being available. A prior court order in Miscellaneous Application No. 1000 of 2015 directed the respondent to return the title free of encumbrances, which encumbrances remained registered as at September 2016. The trial Judge dismissed the respondent's counter-claim for UGX 416,764,552, awarded only nominal damages of UGX 20,000,000 and made no order as to costs.

Issues

1. Whether the trial Judge erred in dismissing the counter-claim but denying the appellants costs.
2. Whether the respondent's conduct in registering mortgages on the wrong titles and presenting a forged stamp duty certificate constituted fraud or illegality.
3. Whether the appellants proved that they requested return of the title in Plot 7347 for sale, so as to justify an award of general damages.
4. Whether the respondent was in contempt of a court order to return the title free of encumbrances.
5. Whether the trial Judge erred in awarding only nominal damages after finding the titles were wrongly encumbered.

Orders

• Appeal allowed (by majority).
• The Respondent pays the Appellants costs of the counter-claim.
• The Appellants are not indebted to the Respondent, the counter-claim having been dismissed.
• The Respondent's act of encumbering the Appellants' titles with mortgages was illegal and fraudulent.
• The Respondent shall release titles for Block 265 Plot 7346 and 7347 free of all encumbrances.
• The Respondent shall pay the Appellants UGX 80,000,000 for each illegal mortgage for each year they remained on the property.
• The Appellants are awarded general damages of UGX 120,000,000 with interest at 12% from the date of judgment until payment in full.
• The Appellants are awarded costs of this appeal and the court below.

Rules and key headnotes

Legislation cited (5)

• Civil Procedure Act s.27(1)
• Civil Procedure Act s.27(2)
• Civil Procedure Rules Order 2 rule 1
• Civil Procedure Rules Order 8 rule 2
• Rules of the Court of Appeal Rule 30(1)

Cases cited (11)

• Senkungu Yakobo and 4 Others v Cresenio Mukasa (Civil Appeal No. 14 of 2014)
• Fredrick J. Kaabwe v Orient Bank and 5 Others (Civil Appeal No. 4 of 2006)
• Julius Rwabinumi v Hope Bahimbisomwe (Civil Appeal No. 10 of 2009)
• Attorney General v Paul Semwogerere and Another (Constitutional Appeal No. 3 of 2004)
• Wills International Engineers and Contractors and Another v DFCU Bank Ltd (Miscellaneous Application No. 1000 of 2015)
• Housing Finance Bank Ltd v Edward Musisi (Miscellaneous Application No. 158 of 2010)
• Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873
• Pandya v R [1957] EA 336
• Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
• Mbogo v Shah [1968] EA 93
• Kabandize John Baptist and 2 Others v Kampala Capital City Authority (Civil Appeal No. 36 of 2016)

Cases citing this judgment (2)

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.

• M s Tumusiime, Kabega & Co. Advocates v Wills International Engineers & Contractors Limited and Another (Miscellaneous Application No. 165 of 2025)
• DFCU Bank Limited v Wills International Engineers & Contractors Ltd and Another (Civil Application No. 531 of 2022)

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