7l ,l

I
I
t
)
THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA
AT MENGO
(CORAM: ODOKI, CJ, ODER, TSEKOOKO, KAROKORA, AilD
MULENGA, JJ.SC) /
clvl L APPEAL NO. 4 OF oo4

BETWEEN

STANBIC BANK UGANDA LTD APPELTANTS

AND

UGANDA CROCS LIMITED RESPONDENTS

appeatfromchectecisionofthecourtofAppealinKampala(okeilo,
eiiwau and Kicumba, Jlfl ctetect 27/1/2OO4 in Civll Appaal lyo' 47 of
2009)

JUDG MENT OF ODER, JSC.

This is a second appeal, brought against the decision of the

court of Appeal, which upheld the judgment of the High
Court in Kampala (okumu-Wengi, J) allowing the
responclents' suit against the appellant'

The background of the case regarding which the High

courtandtheCourtofAppealmadeconcurrentfindings
of law and fact is brieflV as followsr On 21* November,
I
I

1990, Dr. Alex Babitunga (now deceased) ancl some

zimbabweaninvestorsincorporatedtherespondent(the
compang, with the object of rearing crocodiles for
purposes of export business. ln the process, the company,
opened in Kampala two bank accounts with the appellant
(the banh in January, 1991. one account was for foreign
currency (u.s Dollars), and the other was a local currency
(Uganda Shillings) account' Both accounts were to be
operated according to the company's mandate' Dr' Alex
Babitunga, the sole resident director, was specifically
authorized to operate these bank accounts. There were
to the effect that in the event of any
atso ctear instructions
changes the same would be communicated to the bank'

The chairman of the Board of Directors of the companv,

one u.H Bristow, subsequently advised the bank of some
changes, introducing l-A. Cader, vivian Hector Bristow,
Anthony Douglas Bristow and Colin Neil Hewlett as

directorsoftheCompanyanclsignatoriestoitsbank
accounts.Thespecimensignaturecardswereissuedand
certifiect by him. The cards were admitted in evidence at
(d)
the trial of the suit as exhibits P6 (a), P6 (b), P6 (c) and P6
respectively. The Bank was advised to honour cheques
duly signed bV anY two of the authorized signatories' A

2
dispute between the companv and the bank arose in
respect of exhibit P.7 (b), the specimen signature card
(susan)
allegedly issued for susan Margaret Howard Bristow
as a director of the company. The dispute arose because
thesignatureofDr.AlexBabitungaauthenticatingSusan's
specimen signature card was apparentlY forgecl ln
adclition, the word ALONE was written on that card, being
an alteration of ANY TWo TO SIGN which was previously
written on the card. ln addition there were cancellations
on Exhibits p.6 (a) and p.6 (d) to the effect that the words
AtrlY TWO TO SIGN to read ANY ONE TO SIGN. These
cancellations were done to those specimen signature cards
without anV initials, signatures, authentication or stamping
by the person or persons who cancelled them.

The specimen signature card issued for susan was also

backclated to 30.12.1991, a date prior to the cleath on
g.2.1ggl of Dr. Alex Babitunga who allegedly authenticated
it. The dispute led to the companv filing the suit against
the bank on the grounds, inter alia, that there had been a
fraudulent change in the mandate, as a result of which the
companY's bank accounts were operated bV unauthorized
signatories to withdraw the monies claimecl in the suit'

J
The company also allegecl that the bank was fraudulent
andhadactedinbreachofitsduwtothecompanyasits
customerandhadbeennegligentinpermittingthe
companv's accounts to be cleared of allthe money in them
without the companv's authoriw. The company reported
itscomplainttothepolice,whoinvestigateclandreported
the circumstances in which susan came to acquire a
mandate to operate the companY's bank accounts'

lnitsclefencetothesuitthebankdeniedliabiliw,
contending, inter alia, that operation of the company's
bank accounts bV Susan had been authorized by Dr' Alex
Babitungabeforehisdeathinlgg2.Thebankfurther
contended that bV paving out money, the debiting of
which was being attributed to Susan, the bank was
honouring instructions of its customer according to
mandate.Thetrialcourt,howeverdidnotagreeWiththe
banks' contentions ancl evidence and found for the
company, entering juctgment in its favour for us Dollars
t46,444,64 and Ugancta Shs: 181,375,893' The companv
was also awarded costs of the suit.

4
The bank appealed unsuccessfullv to the Court of Appeal'
Hence this appeal. Nine grounds of appeal are set out
in

the memorandum of aPPeal.

They arer

1. The learned Justices of Appeal erred in law and in

fact in disallowing the 1st grouncl of appeal on the
ground that the trial juclge "did consider that
suzan Margaret Howarct Briscow signecl the
respondent's cheques with other clirectors of
the company but tt at she clid so without the
authoritY of the com0anY1

of Appeal erred in law ancl in

2. The learned Justices
fact in not holding that the respondent was
estopped from saying that Susan Bristow was not
authorized signatory to the respondent's accounts'

3. The learnecl Justices of Appeal erred in law and in

fact in holding that the matters they referred to in
their decision showed that "the bank acted
irreEutarty and or negtigently in the operation
of the comqanv's accounts.

5
 answer to grounct 4 of the memorandum
4. ln their
of the appeal the learned Justices of Appeal erred
in law and in fact holding that the respondent
cliscovered Suzan Bristow's affairs through PW'1'
who -" was reatty che directing mind and will of
the company.'

5. The learned Justices of Appeal erred in law and in

fact in holding that the suit was not time barred'

6. The learned Justices of Appeal erred in law and in

fact in holcting that'. "ln order to constitute a
tawFul mandate, Anchony Briscow was
supposed to sign cheques with other
siEnatories. when he siEned alone, he was in
my view, in breach of that authority' He was
also in breact of that mandate when he siEned
with Suzan who was noC an authorized
signatorY."

7. The learned Justices of Appeal erred in law and in

fact in holding that there was no double award by
the trialjuclge and that ground 7 fails'

6
 of Appeal erred in law and
8. The learned Justices
misdirected themselves on the burden of proof
when thev helct tnat "-..- nhe burclen of proof
shifted to the aPpettant in view of the clear
provisions of section 7OO anct section 7o2 of
the Evidence Act- ft e bank should have callecl
evidence to show that the PaYments
/withdrawats from the company Accounts were
to discharEe tegat tiabilities of the respondent"'

9. The learned Justices of Appeal erred in law and in

fact in holding tnat- 'groancl S fails-"

Dr. Joseph Bvamugisha and Mr. Kanyeimbwa

represented the bank ancl Mr. Kimuli and Mr'
Bwanika appeared for the comPanY.

Dr. Bvamugisha, who argued the appeal, informed

the Court at the commencement of his submission
that the appellant was not appealing against the
Court of Appeal's decision up'holdinO the trial
court's answers to issues No. 1 and No. 4 at the trial'

7
lssueNo.lWas,whetherthetetterof6/7/92ExhibitP.7
b)andthespeclmensignaCurecarctofsugantlargaret
b) wete signecyexecutecl
Howard Bristow Exhiblt P.7
by the tate Dn Atex Babitunga on hehaff of the
Ptalnciff, anct whether the same were lawfuily
presenCed to the defendant-"

ExhibitP.T@|Wasaletterdated61111992,purportedto
have heen written bv Dr. Babitunga, before he died, to the
manager of the bank about the companv's local and
foreign currencY accounts.

It said: -

"Ptease find enctosed duly completecl

specimen sigtnature Form- Please be aclvised
that Mrs. s.Ia.H. Briscow has recently been
appotnted a clireccor of the company'"

Exhibit P.7 (b) a specimen signature card, purported to

informthebankthatMrs.SusanBristowWasadirector
of the company, and that the bank was authorized to
honour and charge cheques or Bills made on the
companv's account provided that they were signed bV

8
 clirector of
two directors. White it introduced Susan as a
the companv, it dicl not authorize her to be
a signatorv

to the company's bank accounts'

answer
ln his answer to the first issue at the trial' which
learned trial
was up-held bV the Court of Appeal, the
juclge, on the evidence available to him' found that
signatures of Dr. Alex Babitunga appearing
on exhibits
[email protected](b)Wereforgeries'TheVWerenotsignecl
by him. The learned trial iudge also found that
the

purported specimen signature card for Susan was

altered from "two to sigln" to "one to sign"'

tssue No. 4, which the learned trial juclge answered in

of
the negative, which answer was upheld bV the Court
Appeal, was 'wt ether the letter by Susan
M'H'

Bristow datecl 27/7/9' constitutecl proper

instructions/manilzSs rcgarcling Che operation
of
in
the ptaintiff's bank accounc"' The letter' aclmitted
evidence as exhibit P.8, was written by Susan
M'H'

Bristow,tothebankregarctingthecompanv,sU'SDollar
to: -
account with the bank. lt instructed the bank

9
 (i) issue a bank draft in the sum of British Pound
Sterling 5,250.00 in favour of GaileY and Roberts
(U) Ltd;

(ii) arrange a telegraphic transfer in the sum of us$

1,1315.00 tO E.J. BrOOk & cOmpanv, Newark, N'J,
USA;

(iii) issue a bank draft in the sum of USS 27,471'00 in

favour of Katebo Fisheries Ltd, and;

(iv) transfer the sum of ug. shs: 115,000,000/: into

the company's local account at the bank'

The last paragraph of the letter said:

(v) ,1here dppear to have been some problems

with our signatories in the past, which we
woutd tike to ctarifY- We require only one
sigtnetory to sigtn transactions for both our
tocal anct ttsi eccount- we trust thls clarifies
matters, thank you for your assistance"

l0
The letter was signed bY susan M'H' BriStOW' Without
indicating the capacitY in which she did so'

acceptance
tt is mV considerecl opinion that the appellant's
of, and clecision not to appeal against' the concurrent
on the
findings of the trial court and the court of Appeal
two issues has a hearing on the appeat' lt amounts
to an
hacl no
admission bV the appetlant that Susan Bristow
with
authoriW to operate the company's bank accounts
her
the bank, ancl that in so far as the bank honoured
signature and instruction to operate the companv's
in
accounts, "the bank actect irregutarly and negligently
view'
the operation oF the company's accounts'' ln my
this disposes of the first and third grounds of appeal'
which should fail.

Dr. Bvamugisha next argued ground five' He submitted

that contrarY to the concurrent findings of the trial Court
knew of
and the Court of Appeal that the companv first
fraudulent operation of the company,s accounts,
Susan,s
without authoriw, from the Police investigation report
datecl3o.8.2oo1,(exhibitP.13);Susan'sfrauclwaswithinthe
knowledge of the companY long before that date'
Le?ihectcounselcontended_thatPaulBakashabaruhanga

ll
(P.W1) personallv knew before the Police report (P'13) that
Susanwasoperatingthecompany'saccountswithout
authoriw. This, for instance, ls incticatecl by the resolutions
passed by the Company's extraordlnary general meeting
chairedbYP.W1on23.5.1997(exhibitD4)'Theresolutions
so passect showecl that the company already knew of
susan's fraudulent operation of the companv's bank
account.Atthatmeetingitwasnotedthatwitheffect
froml2.5.lggT,Susananctherhusband,AnthonYBristow,
to be clirectors of the Company; ancl it was
hacl ceased
resolvedthatthecoupleshouldmakefinancial
accountability to the company for the period 1'1'1992 to
31.8.1996 when they were managing the affairs of the
company, ancl that the Boarct of Dlrectors of the Company
should use all legal means to secure such accountability
fromthecoupleincludingcriminalproceectings.Learned
counsel contencled that P.wl was the directing mind of
the companY. Consequently, the companY's knowleclge of
the fraucl more than six years before the suit was filed
disentitled it from benefiting from the provisions of
section 25 of the Limitation Act (cap.80). Learned counsel
contendecl that the matters complained of bV the
companyoccurredinlgg5andthesuitWasinstitutedin
2Oot-fter-irYearr lraf€tapsecl. Duringrthat- pertocl-the-

t2
company was aware of susan's activities but took no
action.ThesuitWasthereforetimebarredWhenitWas
institutecl.

Mr. Kimuli, the Companv's learned counsel, opposed the

bank'sgroundsofappeal.Headoptedthesubmissionshe
had made in support of the Companv's suit and appeal in
the High Court and the Court of Appeal respectivelv' He
contended that the principles which govern the duw of a
first appellate court anct a second appellate court clo applY
totheinstantcase.ThetrialcourtandtheCourtofAppeal
havingmadeconcurrentfinctingsoffact,thiscourtcan
onlYinterferewiththeconclusionsofthecourtofAppeal
if the latter misapplied or failed to applv the principles set
outintherelevantrulesofproceclureandindecided
cases. Learned counselcontencted that in the instant, case,
there are no reasons for this court to interfere with the
concurrent findings on issues of fact by the courts below.
Theauthoritiescitedbythelearnedcounselinclude..
Luwero oreen Acres Ltcl vs. Marubeni corporation, civil
appeat ttto.Tg of 7995. 6cll runrepoftecil Banco Arabe
Espanol v5. Bank of UEancla fl999 LLR 84
(SCU);

Kifamunte Henry vs. Ugande H997' LLR 72 (SCU);

lJganda erimlnel4F0eaLllo+7- -
-Eogerfrfltfinothervs-
l3
of 1gg7 Unreportedil Panctya vs' Republlc H957)
61tl
EA 5iJ6; selte vs- Associated Motor BoaC
and Another
flg6g EA 72u; coghtan vs' Cumberlan't n89g Ch' 7O4
rcil; Thomas vs. Thomas H94fl Ac 484 HU' eta'

to
tn Banco Arabe Espanol (supra), this court referred
what it had said in Kifamunte Henry (Supra) with
approval:

,ltcloesnotseemtousthatexceptintheclearestof
caseg,wearereguirecttore'evatuateeviclencelikea
first appettate court' on second appeat' it is sufficient
todecidewhetherthefirstappellatecourtin
approachinE its task, appliecl or faitecl to apply sucn
principtes- see: D-R Panctya vs' R ng,il E A iJ56; Kairu
vs.ttganctaHgTgHcBl2g......ThigcourcwillnocIoubt
considerthefactsoftheappeattotheextentof
law
considering the relevant point of law or mixed
andfacCraisedinanyappeat.IfWere.evaluateChe
factsofeachcasewholesaleweshattassumetheduty
of the firsc appettate court and create unnecessary
uncercainty.Wecaninterferewiththeconclusionsof
thecourtofAppeetifiCappearsthatinconsicleration
-oFCnearyeaIasi'firstappeltatecourtCheeourtof

l4
Appeal mlsapptiect or failect to appty the principles set
ouc in such decislons such as Panclya 6uprat, Ruwala
guprat Kairu (supril'.

The principles stated in this Passage in K ifamunte HenrY

apply to the instant case.

Uncler ground five of appeal, the company's learnecl

counsel submitted that in the instant case, the Court of
Appeal rightly up-held the trial court's finclings that time
of limitation began to run when fraud bY susan, was
discovered bV the company through the C.l.D report datecl
30.8.2001 (exhibit P.13). Before that time the fraud was
(a), Po
concealed, as there were alterations on exhibits P6
(c), P7 (a) ancl P7 (b) in possession of the bank ancl no
outsicter could have access to them.

(cap'80)
To mV mind the provisions of the Limitation Act
applicabletogrounctfiveoftheappealareclear.Section3
of the Act provides that actions founded on contract or
(1)

tort shall not be brought after the expiration of six years

from the date on which the cause of action arose. section
25 provides for postponement of the limitation of time
becl-firthrAct tuh e re- -
-
l5
 (a) the action is based upon the fraud of the defenclant
or his or her agent and,

(b) the right of action is concealed by the fraud of anv

such person as is mentionecl in paragraph (a) - the
period of limitation shall not begin to run until the
plaintiff has discovered the fraud or could with
reasonable diligence have discoverecl it .

ln the instant case, the cause of action was based on both

contract and tort.

ln 'Limitation of AcClons'bV Michael Franks, Sweet and

Maxwell Ltd, 1959, at page 2O2, tne provisions of an
English Limitation Act, equivalent to our Limitation Act
(cap 80) section 25 afe discussed. lt is stated therein
that: 'with regtard to the meaning of fraud, class (a)
covers cases where the cause of action requires the
attegacion and proof of fraud, eg action for cleceit
ancl for rescission on the grouncl of frauclulent
misrepresentation. lt is thus of somewhat limiced
scope. ctass b) brings in cases where a non'
fraudulent cause of action is-willfully eoncealecl

l6
 From the ptainciff by the clefendant either from the
outsec or subsequently- The defendanc's concluct
may be clownright dishonest, DuC it neecl not be
dishonestorinvotvemoralturpiCude,provicleclthat
itisrecktess,orinsomewayunfairorcliscreditable
havingt regard to tfie retetionship between the
parties-conversely, a good motlve will not prevent
the defencrant's conduct from constituting
concealectfraud.ltisctearthereforethatclass(b'
is by no means limiced to common lew fraud or
deceit, and extends, as ctid concealed fraud in
equity, to cases where there ere no active steps
taken towerds concealment- on the oCher hancl, iC
wittnotsufficeCoshowsimptythattheplaintiff
was in fact ignorant ol ltis cause of action'
conceatment of it hy the defenclant, and by the
defendant's fraud, must be estahlished"'

lagreeWiththoseviews.lntheinstantcase,lamunable
tofaultthefindingofEngwau,JA,learnedJusticesof
courtofAppeal,withwhichothermembersofthecourt
agreed, when he said this in his judgment'
"fimestarcedtorunagainsttherespondencfrom
----tfie_ctate.wffithe-fraud-wa*digcovere&alahough

t7
 PW7 was aware oF whac che ctD hed uncovered' Mr'
Kimuti pointec, out thac the appeilant wes ln
possesslon of exhibits P6 @), P6G) encl P7 G), all Of
which were pteaclecl. The appettant was also in
possession oF exhibics PZ E, and P7 b'' lt was
counsel's contention that the alterations on the
speclmen signature cards and exhlbits P7 @) ancl Pz
b) came to the knowteclge oF the responclent
through the reporc texhlbit P-73t- 1he plalnt was
fited on 7n March 2007, within time, according to
co,tnsel, as atso found by the trlal iuclge' I agree
wiCh Chose findings and t cannoc faulC Che Crlal
iuclge on tne matter of timitatlon- fhe suit was not
time-barred. iee section 26 of the Limltation AcC
bap.70. Time startec! to run agalnst the responclent
from Che Cime fraucl was cliscoverecl by Che police
report (Exbt.l,).'

ln the circumstances ground five of the appeal shoulcl

fail.

ThecomplaintingrounclsixisthatthelearnedJustices
of Appeal erred in law and in fact in holding that: "!n
- -----onter to-Gonstitute r lawf u]-mandate;Antlro

l8
Bristoltt was supposed to sign cheques with two
other signatories. when he signed atone, he was in
my view, in breach of that authority' He was also in
breach of that mandate when he signed with Susan
who was not an authorized signatorY"' Learned
counsel referred to Anthonv Bristow's specimen
signaturecard(exhibitP6(d)),whichmandatedAnthonY
Bristow as a signatory. lssuance by the company of
exhibit P6 (d), according to learned counsel, was in
accordance with the companV's resolution dated
14l11l1ggo,(ExhibitP.4(b).Theholdingbythelearned
Justice of Appeal was, therefore, inconsistent with that
manclate. With regard to the expression "ANY TwO TO
SlGlI" written in bold letters on top of exhibit P'6
(d),

withtheword"TWO"cancelledandreplacedbV"ONE"'
learned counsel submitted that the bank should not be
blamed for what apparently happened' Byarugaba
Francis, (Dw',l), the bank's lnternal Manager, testified that
the apparent alteration was not done bV the bank, and
that, in any case, the alteration was of no consequence'
ThelearnedcounselthenpointedoutfromexhibitsPl0
(a), D.16 and D.17 phOtOCOpieS of numerous paid
cheques shown as having been signed bV AnthonY
stow--atrune--or - witrrsu san-MargareFBri steur'--+h

l9
 cheques signed by Anthony Bristow alone, learned
counsel contended, were properly honoured as having
been validlY signed.

ln opposition to ground six of the appeal, the company's

learned counsel submitted that in paragraph 1 of its
written statement of defence the bank admitted
paragraph 5 (n) of the company's plaint, in which it was
pleaded that- "5 The facts giving rise to the cause of
action arose as follows:

(n) specimen signature cards for the above three

signatories whose signatures were dulY certified by Dr'
Alex Babitunga, the Managing Director of the plaintiff,
were submitted to the defendant. The aforesaid carcls
were endorsed "AnY two to sign-"

The "three signatories" in question were listed in

paragraph 5 (m) of the Plaint as:-

i) Anthony Doug las Bristow

ii) colin Neil Hewlett,
iii) vivian Hector Bristow,

20
(Underlining suPPlied).

Thecompanv'slearnedcounselsubmitteclthatthebank's
question was of
actmission of the companv's pleacling in
critical importance to the company's case' Learned
counsel submitted that Anthony Bristow as an authorized
signatory coulcl validlV sign cheques with another one
authorized signatorv, but not alone, nor with another
person who had no authoriW, as he did with Susan' When
thelearnedJusticeofAppealsaidthatAnthonvWas
supposecl to sign cheques with "other signatories"'
it
must have been a slip of the pen, according to learned
counsel, because "other signatories" should have
been

"another signatory"- Anthonv Bristow's mandate as

pleaded in the companv's plaint and admitted in the
bank's written statementof defence was clear' He could
sign only with another authorized signatory' The bank
acted contrarv to the company's instructions by honouring
cheques signed bY Anthonv Bristow alone or hv him
ancl

Susan,whowasnotauthorized'Debitentriesresulting
from such cheques should not have been macle on the
company'saccount.lnthecircumstanceslearneclcounsel
submittect that ground six should he rejected'

2t
The passage from the iudgment of the learnecl Justice of
Appeal which gave rise to the bank's complaint in ground
six of appeal was a conclusion reachecl by the learned
Justice of Appeal in his consicteration of ground six of the
bank's appeal to that Court. The complaint in that ground
was that the learned trialjudge errecl in law in holding that
the sums of USS 345,444.64 and Ug. Shs: 181,373,893/: w€r€
drawn from the company's accounts in the period when
the impungecl signature of Susan Bristow was being
honoured bV the bank and awarding those sums to the
responctent. In the Court of Appeal, the bank's learned
counsel argued that Anthonv Bristow was an authorizecl
signatory ancl the learned trial judge should not have
awarded to the company the moneys he had signed for as
reflected in exhibits D.16 ancl D.17, Mr. Kimuli, who was also
the company's learned counsel in that Court, countered
the bank's contention by submitting that Anthony Bristow
was a signatory only to the local account and he had to
sign with another signatorY, not alone. This was pleacled
by the company and actmitted by the bank in its pleadings:
consequently, when Anthonv Bristow signed alone or with
Susan, that dicl not constitute lawful mandate to pay the
cheques or honour instructions.

22
The learned Justlce of Appeal agreed with Mr'
Kimuli's

submission, hence the conclusion he reachecl

which is
objectect to in ground six of this appeat'

As I understanct it, the conclusion of Engwau' JA' under

groundsixinthatcourtupheldthelearnedtrialjudges
finding of fact in that regarcl. lt was consistent with the
pleadings of the parties and the evidence available'
Bristow
According to the pleaclings ancl evidence, Anthony
was supposed to sign cheques with another authorized
signatory; when, therefore, the learned Justice of
Appeal

said that " Anthony Bristow was supposed to

sign with
other siEnatories", he coulct have meant that Anthony
Bristow was not supposed to sign alone, hut with any
other of the authorized signatories' lt would be a
holding
misconstruction of the learned Justice of Appeal's
to suggest that he meant that Anthony Bristow was
supposecl to sign with more than one other
signatorY' ln
my view, the holding of the learnecl Justice of Appeal to
the effect that cheques signed by Anthony Bristow

together with Susan were invalid anct should not have

been debited to the companv's accounts cannot be
faulted. The fact that Susan Bristow who had no authoriw

23
authority did not validate susan's signatures on the
cheques. consequentlv, ground six of appeal should
fail'

Groun(ttwooftheappeal,Whichtheappellants,learnecl
counselarguednext,complainedthatthelearnedJustices
ofAppealerredinlawandinfactinnotholclingthatthe
company was estopped from saying that Susan Bristow
was not an authorized signatory to the companY's account'
Relvingonsectionll4oftheEvidenceAct,thebank's
learned counsel submittecl that the fact that susan Bristow
wassigningwithAnthonvBristow,whowasadirector'and
subsequentlv signed with Frect Kamugira, another director'
without the company protesting, but instead acquiescing
to her signatures on the cheques, estopped the company
from asserting at that late stage that susan Brlstow was
not authorized. tearned counsel also relied on section 23
ofBillsofExchangeAct(Cap.68).Learne(lcounse|
contendedthatWheresusansignedWithanother
authorizedsignatory,herownsignatureWasinoperative.
Whereshesignedalonethedirectorsofthecompanydid
notprotest.Thelearnedcounselalsoreliedonsections
(cap'110) and on
147,153 and 157 (2) Of the companies Act
J. C. Hou ghton an d companY vs. Irlothard, Lowe and

24
 Martin Ban k Ltd (1933 )A c. 5 (H.L). with regarcl to
of the companies Act in question' learned
provisions
counsel referred to the testimony of Paul
Bakashabaruhanga (PW.1) to the effect that PW1
and Fred
after
Kagumira became active in affairs of the companY
the latter was appointed a signatory to the bank accounts
general
of the companv; PW.1 was attencting board and
meetings of the companv; statement of affairs of
the

company was tabled from August 1992; adherence to the

the
annual budgets of the companY were enforced; and
balancesheetandreportsofdirectorsWeretabledforthe
enct of 1995. Minutes of the extra ordinarY General
(Exhibit D' 14)
meeting of the company held on 12'5'1997
showthatPW'lattendedthemeetingasanaclministrator
of the Estate of Alex Babitunga (decease) ancl was
appointed to chair the meeting'

Thecompany'slearnedcounselmaclesubmissionsinreplv'
which, he said, applied to the concurrent findings of
the

two courts below regarcting fraud and estoppel' Learned

counsel submittecl that evidence of fraud bV Susan'
Exhibits P.7 (a) and P.7 (b), were in possession of the
bank.

so were Exhibits P6 (a) to P6 (d) On which there were

sign"-te-'any gIIEna l}a
trr ciettt"
-tutr

-Aferatlomfrom*any-tu'oto
25
or ,,atone,,susan Bristow was not an authorizecl signatorY--
afactconcedeclbythebankinitspleacling.Shecouldnot
be a lawful signatory merely by signing with others who
might be lawful or authorized signatories. Learned counsel
submitted that the exhihits he has referred to having been
in possession of the bank, and the companv not being in
the know the issue of estoppel did not arise. The exhibits
and the alterations on the exhibits only came to the
knowledge of the companv through the Police

lnvestigation Report, P.13. The companv did not know, or

it was not aware that Susan was signing. He contended
that the cases of J.C. H oughton & Co. vs. Northard, Lowe
and Wills (supra) ancl Greenwood vs- Martin (supra) are
clistinguishable, and cto not appty to the instant case'

Learned counsel contended that in the instant case

estoppel under S.114 of the Evidence Act did not apply,
because the companv was unaware of Susan's fraudulent
signatures on the cheques until the police investigation
and report.Nor cloes section 23 of the Bills of Exchange
apply because the company did not ratifY Susan's action'
Learned counsel submittecl that another reason the
principle of estoppel does not apply to the instant case is
fraud, which the learnecl trialjudge found was perpetrated

?6
Court of Appeal. The bank cannot therefore benefit
from

the equitable doctrine of estoppel because its hands were

not clean.

conditionsforapplicationoftheequitabledoctrineof
estoppelaresetoutinsectionll4ofEvidenceAct(cap.6).
It provides that when one person has, by his or her
declaration,actoromission,intentionallYcausedor
permitted another person to believe a thing to be true
or
and to act upon that belief, neither he or she nor his
her representative shall be allowed, in anv suit or
proceeclingbetweenhimselforherselfandthatpersonor
his or her representative, to deny the truth of that
thing'
one of the conditions for the doctrine to apply is'
therefore that the act or omission by the person against
whom estoppel is to be set up, as a defence, must have
beenintentionallYcaused.lntheinstantcasethefraud
which the two courts below found had caused the bank to
act to its detriment believing it to be true was unknown
to
thecompanyuntilthepolicereport(P'13).consequentlv
theclefenceofestoppelwasnotavailabletothebank
against the company. For the same reason, the companv
cannotbesaidtohaveratifiedwhatSusanBristowdid.ln

27
not apply either. I also agree with the submission of the
company's learned counsel that the bank did not have

clean hands to benefit from the equitable doctrine of

estoppel.

ln my opinion, the cases of J.C. Houg hton and co. vs

Northard, Lowe, and wills (supra) a nd Greenwood vs.
Martin Bank (Supra) do support the company's case' TheV

areagainstthebank'scase.lntheformercase,tworival
companies, the N. CompanY and W. companv formed the
respondent company to take over certain branches of
their business of fruit importers the shares of the new
companv being equally ctivicled between the two olcl
companies, and the board consisting of two directors of
the N company namely M. and G. Lowe and two clirectors
-
of w. company. By a brokerage agreement embodied in a
letter dated in JulY 1924, between M. LOWe and the
appellant, a firm of fruit brokers, it was arranged that the
appellant should make certain advances to the N. companY
and, should receive all f ruits consigned either to N'
companv or to the respondent company and keep back 70
percent of the net proceeds in reduction of the advances,
ancl it was stipulated the respondent company should

28
obtained a guarantee of the loan from the two Lowes and
a third director of the N. company, who was also the
secretary of the respondent companv. This arrangement
was not ratified bv any agreement under the seal of the
respondent company, but the secretary wrote to the
appellants purporting to confirm the arrangement on
behalfofhiscompany.Thedirectorsoftherespondent
company, other than the two Lowes, first became aware
of the arrangement after it had been in operation for
some months, and it was then put to an end' The
appellants had obtained fruit consignment to the
respondent companv on board several ships without
production of the bills of lacting, on giving an indemnity to
the ships, and thev sued the respondent companY for
delivery of the bills of Lading. The respondents counter
claimed for the proceeds of fruit belonging to them and
not accounted for. lt was held by the House of Loads,
inter alia, that the respondent companv were not
estopped from denying the existence of the arrangement
by the knowledge of the Lowes, in as much as theY were
parties to the wrong done to the company, or bv the
omission of the other clirectors to inspect the accounts of
the companv, which woulcl have disclosecl the

29
'ft onty remalns to consider whether negllgence on
the part of the unlncriminatecl direccors can
form an
estoppet aEainsc the company, I am of the
opinion

Chat it cannoe ft is no part of director's

auty to
inspect account everyclzY' There was nofihing
in the
circumstancesCoarousethesusplcionsoFthetlto
ctirectors as to the exlstence of any such aEreement'
As soon as they were att at home, the whole
thing was
founcl out ancl tne arranEement stopped' and
to hold
Chat Chere wes estoppel because watker'
during the
month of August, near the enct of it, did not inspect
would
the accounts ancl founct out the arrangements'
has ever
be, in my opinion, going much beyond what
been decided agalnst a comPanv''

view is that'
Rpplying this decision to the instant case' mY
it would be going too far to attribute knowledge of
Susan

Bristow's frauct to PW'1, the documents relating

to which
were in the exclusive possession of the bank'
h the case of
G reenwood vs Ma rtin's Bank (supra), the appellant's
bank' His
account alone was opened at the respondent
paid on the
wife forged several cheques, which the bank
app

30
 protect
forgery, but clicl not inform the bank in order to
his wife. Eventually he told his wife that
he would inform

the bank, as a result of which the wife committed

suicicle'

The appellant sued the bank to recover the

monies theY
by his late
had paid out bV honouring the cheques forgect
to
wife. The bank successfullv set up estoppel as a defence
the suit. Upholding the decision of the Court of
Appeal'

the House of Lords said inter alia:

guestion
It mey be said at once thaC there can be no
of ratification or adopCion ln this case' fhe necessary
etements for ratification were not
present ancl

acloption, as understoocl in Engtlsh Law' requires

vatuabte consideraCion, whlct' is not even suggested
here. lhe sote question is whether in the
clrcumsCances of this case the responclents
ate
entitted to set up an estoppel' Itlow the essential
factors givin| rise to an estoppel are, I Chink:

(il e representation or conduct amounCing Co a

representatlon, lnCencted Co lncluce course of
conduct on the part of the person to whom the
reqresentatlon is macle;

3l
 fiil an act or omisslon by the person to whom the
representaCion ls macle resulcing from such
reqresentetion or concluct;

fiiil e detrtment to such percon as a consequence

of the act or omisslon- Mere silence cannot
amount Co but when there is
a representation,
a duty to disctose, deliberate silence may
became signiFicanC ancl amounC to a
rePresentacion."

This case (Greenwoocl Vs Martin's Banlo, too, does not

supportthebankintheinstantcase,becausetherewasno
representation or conduct amounting to representation to
the bank by the company, who dicl not know that monev
WasbeingpaidoutofitsaccountswithoutitsauthoriW
until the police investigation report (Exhibit Po.,l3). This is
differentfromwhathappenedinCreenwoodwherethe
account holder knew about the frauclulent withclrawal of
moneyfromhisaccountbyhiswife,whichheconcealed
from the bank until the wife committed suicide'
ln the circumstances, my opinion is that the facts of the
instant case as established bY the two courts below dicl not
g ver se e op

1'
company'ssuit.Thetwoclecictedcaseslhavediscussecl
above therefore do not applv. Nor, in my view, dicl
section

23 ot the Bills of Exchange Act provide the bank

with a
defence against the companY's claim, because the
companY is not precludect in any waY from setting up
as a

defence Susan's fraud or lack of authoriw in signing the

cheques debited to the company's accounts; nor clid
the

companV ratify her action.

The bank's learnecl counsel further submitted that hV

virtueoftheprovisionsofsectionsl4T,l13r'1,157(1)and
(2) of the companies Act (cap110) ancl from the company's

auditecl account at the encl of every Year, the companY's

directors, including PW.1, ought to have known that Susan
Bristow was signing the company's cheques without
authority. The trial court and the Court of Appeal did not
makeanyfindingontheapplicationofthesesectionsof
the Companies Act to the instant case' This should not be
surprising, because the matter was not arguecl before
them.lshallcommentbrieflyontheappellant's
submission in this regarct. Firstly there was no evidence
thatPW.landtheotherdirectorswereinvolvedinthe
day-to-day management of the companv affairs' On the

33
 the
contrary, the minutes of the extra ordinary meeting of
companY held on 12.5-1997 (Exhibit D.14) states:

" O.Slg7 ilanagement of the company. lt was notecl

that:

(i) with effect from 31't nugust 1992, the

following were the dulY appointed directors of
the companY.
(al s.M.H Bristo\i, (Mrsl
(b) Anthony D. Bristow
(ct Paul Bakashabaruhanga, and
(dl Fredie KamuEira.

(ii) The flrst two tllrectors were the only active

ones involved in the day to day management of
the companY,

(iiil. The Dormant Gtirectors did not have any int(ling

about the state of affairs of the companY
particularly finances, for example, the proceeds
of the skin sale of October1995 amountlng to us

Doltars 108,538.85 as welt as those of 1996 were

34
(iv) since september 1994 the tWO Bristows ceased to
live at the farm- A'D' Bristow left Uganda
in
settlecl
February 1995 whilst Mrs s' M' H' Bristow
in Kampaala (sic) not attending to the farm"'

on the one
ln his evidence, PW.1 appears to confirm this
1995' Fred Kamugira
hand, but on the other he said that in
became active particularlv as regards
finance'

Secondly PW.1's evidence that he

was attencling both
general and directors meetings of the companv
did not'
discussed at
nor clid other evidence, disclose what were
no evidence that
those meetings consequently, there was
PW1 and other directors were able to lcnow from the
Bristow'
meetings the fraudulent activities of susan

shoul€l fail'
tn the circumstances, ground two of the appeal

ln mV considerecl opinion, mV discussion and

conclusions
also dispose of
on grounds two and five of the appeal
ground four, which should also fail'

35
The appellants' learned counsel next argued grouncls
seven, eight and nine of appeal together. He submitted
that the three grounds are basecl on the appellant's
evidence that:

(i) the deposits on the Uganda shillings account were

transfers from the U.S. Dollar account. Exhibits D'16
and D.17 show how the monies on the Uganda
shillings account and on the US Dollar account were
used respectively. The monies were not lost.

(ii) Many cheques were signed by AnthonY Bristow and

Frecl Kamugira, who were authorized signatories'
Consequentlv, cheques were not paicl in breach of
the contract between the hank and the companv
as its customer.

(iii) Some cheques were paicl to the companv's

creditors.

The learned counsel referrect to the Report ancl Financial

Statements of the company for the Year-ended 31.8.1996
(Exhibit D.9). The report contains the report of the
au ors,

36
the vears 31t12t1gg2 to 1996' Learned counsel submitted
that uncler ss. 101 and 102 0f the Evidence Act'
the

companv had the burclen to prove that the

bank actecl

recklesslv and negligentlvby paving cheques signed by

Susan Bristow. ln the instant case, that is where the
company stopped. lt should have also proved that it
therebY incurred loss. This the companv
did not do' lt
left it to the court to assume that loss ensued'

Under these grouncts the companv's learned

counsel
was no person
replied that as exhibit P.7 (c) showed, there
to operate the dollar account from 12'2'1992' because
Collin Neil Hewlett hacl resigned from the companv;
Alex

Bahitinga hacl ctied, Anthony Douglas Bristow

and cacler
namelv: Vivian
were living in zimbabwe. OnlV one clirector'
contencled
vector Bristow was in uganda' Learned counsel
the
that, as there was no person to operate that account'
bank should not have transferred money from
that

accounttothelocalaccountfrom12'2'1992''6s6srnpanV
was consequentlY entitled to recover from the
bank

monies which were clehited on the accounts

without its
lost bV
instruction. With regard to the amount of monev
the company as a result of the bank's unauthorized
paymen ou o

37
submitted that as founcl by the two courts betow the
testimonv of PW.1 and statements of account tendered
in
(bl, D'16' D17 showed
evidence as exhibits P. 12 Ql, P' 12
thatthe6srnp?hVlostmoney.onthebank'scontention'
that payments ctebited on the companv's accounts were
macte to parties to whom the companv owed
debts as
suppliers of goods or services to the companY, the
learned

counsel submitted that the bank hacl the duty to adduce

evidence to prove that withclrawals or paYments from
the

companY's accounts went to discharge the companv's

lawfulliabiliw'Thebankclidnotadclucesucheviclence.
RelYing on the case of B. Lig et iverp ooll Ltd.
(L vs.

BarclaYs Ban k Ltd. (19 27) All.E.R. 45\, learned counsel

contendecl that the bank cannot benefit from the
payments shown on exhibits D.'16 and D'17 to have been
payees,
macte to various recipients. Mere indication of the
or beneficiaries of the cheques is not evidence of the
companV's lawful liabilities.

With regard to the Report and Financial Statements for

TheYearEnded31.8.1996(ExhibitD.g)onwhichthebank,s
learnect counsel relied to show that the company
incurred

expenditures cluring the five years covered by that Report'

the companv's learned counse a op

38
the lower court to the effect that the bank called
no

witness to support its case that the total

expenditure of

shs 487,006 for the period 1992 to 1996

was legitimatelv

incurred.LearnedcounselconcludedthatExhibitD.9like
exhibits D.16 and D.17 was of no use to the bank'

between a
Legal principles which govern the relationship
of a bank
bank and its customer are well settled' The ctutv
is to act in accordancewith the lawful requests of its
customer in normal operation of its customer's
account

consequently, a banker who has

paid a cheque drawn
without authoritv or in contravention of the customer's
account
orders or negligentlv cannot ctehit the customers
with the amount. A banker is under a duW of care
to its
question payment'
customer which may require him to
So9: Bohex Ltd vs. Gol d Trust Ban k civil
Ap pe al No 29 of

1993 (SCU) ( unre orted) HarsbrY's L aws of

En Iand, 4th
pays
Edition, votume 3 (11 pa tagrap h 175. lf the banker
being his
and clebits it's customers in reliance on signature
its customer
customer's, which is not so, he cannot charge
not
with that pavment. ln paying cheques' a banker must
be negligent and cannot charge its customer
with money
Law of Banking
lost through his negligehc€. See: Pagets
rwo 't
11 th rah BU s AE
Edition b ME

39
365 and 269; Cons ulta nt
surveyors & Planners vs.
Standard Bank (u) ttd. (1984) HCB where a recl signal
manifestsitselfthebanker's6utvmaVbeevenmore
stringent. see: Barclay's Ban k PLC vs. Qu in-acre Ltd &
Another (199 2) 4 All.E.R 331.

ln instant case the learned trial judge made a finding of

the loss caused to the Company as follows:

'consequentty issue lvo- 6 is ohviously answered

to saY that the bank unlawFullv wrongly,
recktessty and negtigently honoured chegues
slgned by susan Bristow to Che cletriment of its
customer. There was evidence Exhibit P'72 (a)
and P.72 b) to show that a 1um of U5$ 945,444'64
and Ug- flhs:787,578,895/= were clrawn from Che

company9 accounts in the period wl'en the

of susan Bristow was belngl
impungted sigtnature
honoured by the Bank- tndeed tl'e bank hes
arguecl that it onty honoured the cuscomer's
mandate, which manctate t have conclucled to
have been itlegtltlmate- t onty heve to emphasize
that the Bank tn this case hac, to exerclse clue

40
 care to ensure ChaC wlrat happened dlcl not
occur
or if it dlct, to rechifY iC".

TheCourtofAppealupheldthetrialcourt,sfinclingsonthe
amounts of moneY paid out bV the appellant
from the
respondent's bank accounts without the letters
of
in his
authoriw. The finding were made bv Engwau J'A
lead judgment with which the other members of the Court
agreecl. He clid so in disagreement with the appellant's
complaints in grounds of appeal, numbers
six' seven and
grounds six was
eight. The gist of appellant's complaint in
that Anthony Bristow was authorized signatorY and
the
he had
trial juclge should not have awarded the monevs
signed for as reflected in exhibits D16' D17 '
Even if those

cheques were signed bY Anthony Bristow

ancl susan
Bristow, both were signatories and the sums
involved

shoulct not have been awarcted to the respondent'

so in mY
Engwau J.A in his lead judgment found' rightlv
Susan was
view, that Anthony (Bristow was a signatory' but
not.lnordertoconstitutealawfulmandateAnthonYWas
supposect to sign cheques with another
signatorY' When
he signed alone, he was in hreach of that authoriw'
He

he signed with
was also in breach of that mandate when
susan who was no an

4l
premises, there was no justification in interference with
the amounts awarcted bv the learned trialjudge'

ground seven was

The gist of the appellant's complaint in
the
that the learnecl trialjuclge was wrong in holding that
credits on the Uganda shillings accounts were transfers
from the accounts' Reliance was placed on
US clollars
exhibit D.17 for that. ln the view of the appellant's
counsel, it woulcl amount to double award because Shs:
200 million came from the dollar account. The

respondent's counsel repliecl that as from 12.2.1992

noboclv had the mandate to operate the foreign
currency

account consequently if there were transfers from

that

account, those transfers were unauthorized'

The learnecl Justice of Appeal agreed with the submission

of the responclent's counsel. The responclent's learned
to exhibit D'17' the
counsel furtner argued that according
total amount on the dollar account was US 75'000'
Accorcling to the learned counsel's calculation'
the balance
on the debit side would be USS 275'388' which was
unlawfullY debitecl to that account and that would have
regarcl the
been the moneY due to the respondent' ln this
learne Jus ces o

42
 "Whether not Gounset is correct in hl?
calculations, my ftndtng ls Chet there was
no
ctoubte award by the Crlal luclge on Che matten
h
that regtarct glrouncl 7 also feils"'

I am unable to fault the learnect Justice of appeal's fincling

in this regard.

The appeltant's compliant in ground I was that

issue No'7
"whether
at the trial was not cletermined' The issue was
to
the payments from the plaintiff's accounts were made
plaintiff'"
the plaintiff's creditor or for the benefit of the
The appellant's learned counsel submitted that the
payments, details of which appear on exhibits D'16 and
D.17 were made to discharge the respondent's
obligations'
from
According to counsel, exhibit P'9 shows expenditures
1gg2-1996and,therefore,therespondentwasnot
entittedtoclaimthem.Theresponclent'slearnedcounsel
responded that the burden under sections 100
and 102 of

the Evidence Act was on the appellant to show that

thev

had mandate to effect those paYments on behalf

of the
respondent. The appellant had not adduced anY evidence
at all to show that the paYments from the respondent's
accoun

43
indication of the pavee's or beneficiaries of cheques or
instructions as in exhibits D.16 and D'17 was not eviclence
of legal liabilities of the respondent' Those pavments
could have been made by waY of gifts or as part of a
fraudulent scheme to Siphon the respondents' funds'

ln this regard, the summarv of the finctings of the learned

Justice of Appeal, Engwau, J.A, is found in the following
passage of his juclgment: -

'tt was incumbent, in my view, upon the appellant

bank to prove thaC the payments en'exhiblt D'76 encl
D.77 end the expendiCures shown in Exhibit D'9 were
made wlth authoritY Co the respondent's
credltors/beneFiciaries or for the benefit oF Che
responclenCcompany.Thlsburclenofproofshiftedto
Che appettant in vtew oF tfie ctear provlsions of
sectlonsTooanclTo2ofCheEviclenceAct.Thebank
shoutd heve catted eviclence to show thec the
payment/wiChdrawats ftom Che company eccounts
wenc to ctischarge tegat tiabillCies of the respondent
companY. ln the absence of guch evldence, Exhiblts
D.76, D.77 ancl D.79, are of no use to Che appellant's
case."

44
After I had consiclered these grounds (seven' eight anc'
nine), it became necessarY for me to obtain from
the
partiestotheappealclarificationofcertainexhibitsand
evidence relevant to the determination of the issue
of
quantum of damages, which is the substance of the
appellant's comPlaints in those grouncls. Such
points raised hy the
clarifications appeared necessarv from
appellant's learned counsel.

After the hearing of the appeal, the Court sought from the
partiesclarificationofcertainexhibitsandevidenceWhich
we considered relevant to the issue of quantum of
damages. Such clarifications appeared necessarY from
the

points raisect bv the appellant's learned counsel'

22O to
The exhibits in question are D.16 anct D'17' Pages
223 ot exhibit D.16 are shown to have been signed
by

Anthony Bristow, who was an authorizecl signatory; by

susan H. Bristow, who was an unauthorizecl signatory;
ancl

by A. Bristow together with r. Kamugira, both authorized

signatories. The clarification we sought was, whether
those

chequesshownassignedbytheauthorizedsignatories
part
were counted against the bank or not' Pages 226 ancl
o page o

45
signatoriestothedebitentries;whereassignatoriesonthe
second part of pages 227 afe shown tO be either
susan H

Bristow alone or A. Bristow with susan H' Bristow'

The

clarification we sought was whether all the debit entries

on both pages of exhibit D 17 were unauthorized' We
also

soughtclarificationofWhereintherecordwereexhibitsp.
p12 Ql was absent
12 @l and p.12 (b) to be found. Exhibit
from the record altogether-

The Registrar of the Court conveved to the Lawyers

of the
parties in writing the clarifications we had sought' and
they replied, the respondents' lawyers doing so first'

lnmyopiniontheclarificationsfileclbythepartiesmostly
repeatedthesuhmissionsmaclebvtheminthiscourtand
the Court of Appeal. Exhibit P'12 Ql was filed by the
appellant as a supplementary record' Further in my
view'

thec|arificationsdonotaffecttheconcurrentfinclingsof
the trial court and the court of Appeal on the issue of
the
quantum of damages-

|n consiclering the quantum of ctamages, an important

factor,whichmustheborneinminct,isthatalldocuments
concern ng e

46
possession and custodv of appellant bank' Only the bank
knew and was responsible for entries
on the bank
accounts. It bore responsibitiW
as the banker to what

entries were made on those

accounts without
respondent's authority'

lnthecircumstanceslamsatisfiedthattheCourtofAppea]
was justifiecl in up'nolcling the trial
court's conclusion that

thebankWasliablefortherespondent,smonevsclaimed
in the suit, namelv US dollars 346,444,64 and
Uganda

shillings 1 81,375,893.

with costs to the

The appeal should therefore be clismissed
respondent in this Court anct Courts below'

.J*
It+ dav of .....'ff .v.Q gfi '., 2005.
Datecl at Mengo this

A.H.
JUSTICE OF THE REME COURT.

47
 THE REPUBLIC OF UGANDA

IN THE SUPREME COURT OF UGANDA

AT MENGO
(coRAM: ODOKI, CJ, ODER, TSEKOOKO, KAROKORA AND
MULENGA JJ,SC.)

CIVIL APPEAL NO.4 OF 2OO4

BETWEEN

STANBIC BANK UGANDA LTD APPELLANT

AND

UGANDA GROCS L!MITED...... .RESPONDENT

Appeal at Kampala
[Appeal from the decision of the Court of
iOiin",
' Engwau and Kitumba, JJA') dated 27 January 2004 in
Civil APPeal No. 47 of 20031

JUDGMENT OF ODOKI, CJ.

I have had the advantage of reading in draft the judgment

prepared by my learned brother, Oder JSC' I agree with him that
this appeal should be dismissed with costs to the respondent'

As the other members of the Court also agree, this appeal is

dismissed with costs to the respondent in this Court and the
Courts below.

Da t Men go this I 7 dayof.. ....2005

0{.,5r\^
o
CHIEF JUSTICE
 THE REPUBLIC OF UGANDA

IN THE SUPREME COURT OF UGANDA

AT MENGO
AND
(CORAM: ODOKI, Cl., ODER, TSEKOOKO' KAROKORA
' MULENGA" JJ.S.C.)

CIVIL APPEAL No.4 OF 2004'

BETWEEN

APPELLANT
STANBIC BANKUGANDALTD
AND

RESPONDENT
UGANDACROCSLTD
of APpeat at Kampala (Okello' Engwau
[Appeal from the decision of the Courtin Ciiil APPeal No'47 of 2Oo3J
and Kitumba, il.A) dated i7/1/2O(M

JU DGME NT OF TSEK ooK O,J SC:

have had the benefit of reading in advance the
draft judgment
I
A'H'O'Oder'
prepared by my learned brother, the Hon' Mr' lustice
JSC,whichhehasjustdelivered'Iagreedwithhisconclusionsand
the orders which he has ProPosed'

I have observations to make concerning the

value and importance of

schedulingconferenceinCivilCases'Asuitintheseproceedingswas
instituted in the year 2001' By then the Civil Procedure
lawyers in
three years. By the time the trial began on 3U8/2001'
this case were exPected to know the scheduling conference

procedure introduced bY S'I. 1998 No.26 and the value and

been held in
importance of such conference. None appears to have
this case.

XB of
The scheduling conference was introduced by the new Order
the Civil Procedure Rules. Because of Rule 1 (1) of that
Order' a

trial court is expected to hold a scheduling conference to sort out

pointsofagreementanddisagreement,thepossibilityofmediation'
arbitration and any other form of settlement' Because
the central

issuein this case is reconciliation of figures, I expected that at a

scheduling conference stage, parties in this case should
have

produced properly audited accounts of the respondents as

part of

expeft evidence and try to narrow down points of disagreement'

parties and
That is the stage when proper issues would emerge and
thecourtwouldsettletherealissuestobetriedanddetermined.

It puzzles me that counsel for both parties were content with

as the
throwing at the trial judge just a mass of documents such
numerous cheques which had been signed and
paid out and

numerous documents involved in the payments' In this case the

amountofmoneyclaimedbytheplaintiffordeniedbythedefendant
period of
was central. since the transaction involved spanned over a
come
time, it seems to me that the most helpful evidence would have
from the said experts (accountants or auditors) which would have
 and how much
reflected what was paid out, through which cheques
respondent and the
of it was paid on the business transactions of the
time of PaYment.

Rather than calling Mr. Erongot (PW3) to testify

only on banking
engaged to
practices, accountants or auditors should have been
which was in
examine relevant documents and asceftain the money
saw it'
dispute and produce a true position as the experts

was
As it is, parties left court to haaard a guess at what money
at the
missing. No wonder that the learned trial judge arrived
quantuminthemannerhedid.Thisforcedustoseekclariflcations
from both paties' The clarifications provided have
not helped
number of
matters either. This case is yet one of the increasing
cases by assembling
cases where parties do not help courts to decide
deligence'
and presenting relevant evidence with appropriate

Detivered at Mengo *is..!ftL"'day of 5

J .N.T kooko
Ju of the SuPreme Court

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I
 THE REPUBLIC OF UGANDA
IN THE SUPREME COART OF UGANDA
AT MENGO
(CORAM: ODOKI, CJ.; ODER; TSEKOOKO; KAROKORA;
AND MULENGA; JJ.SC.)
CIWL APPEAL NO. 4 OF 2OO2

BETWEEN
STANBIC BANK UGANDA LTD: APPELLANT
AND
UGANDA CROCS LIMITED: RESPODENT

(Appeal from lhe decision of the Court of Appeal at Kampalo

before (G. M. Okello, S. G. Engwau and C. N. B. Kitumba, JJA')
dated 2/h January 2004, in Civil Appeal No. 47 of 2003).

JUDGMENT OF KAROKORA, JSC:

I have had the advantage of reading in draft the judgment prepared by my

leamed brother, the Hon. Justice A. H. O. Oder, JSC and I agree with him
that the appeal has no merit and ought to be dismissed with costs here and in
the courts below.

Dated at Mengo This i? day of: fil.Cud rr...Iir, 2005.

A. N. KAROKORA
ruSTICE OF T}IE SUPREME COI.JRT
 IN THE SUPREME COURT OF UGANDA
AT MENGO
CORAM: ODOKI C.J., ODER, TSEKOOKO, KAROKORA' AND
MULENGA JJ.S.C.

CNIL APPEAL NO.4 OF 2OO4

BETWEEN

STANBIC BANK UGANDA LIMITED ::::::::::::::::::::: :APPELLANT

AND

UGANDA CROCS LIMITED: :::::::::::::::::::::::::::::: :RESPONDENT

(Appeat from decision of the Coutt of Appeal (Okello, Engwau and Kitumba JJ'A) at
Kampala in Civit Appeat No, 47/03, dated 2/h fanuary 2004)

.!IIDGMENT OF MULENGA JSC.

I had opportunity to read in draft, the judgment that my honorable and

leamed brother, Oder JSC, has just delivered. I agree with him that this
appeal should be dismissed with costs to the respondent. For emphasis only,

I wish to add brief remarks conceming the 7s, 8s and 9s grounds of appeal.

It is not necessary for me to outline here the facts and background of the
afrneal as they are adequately set out in the judgment of Oder JSC- It

I
. suffices to say that the respondent company, which at all material times
maintained with the appellant bank, two bank accounts in dollars and in
shillings respectively, sued the appellant for, inter alia, recovery of sums of
money that the appellant debited on the said accounts in breach of its

mandate. The appellant's main defence was that the debits were in respect of
payments made out of the accounts by authorized signatories. Further, in
addition to other technical defences like estoppel and limitation on which I
do not intend to comment, the appellant contended that the payments in
respect of the debits complained of, were for the respondent's benefit, and
that consequently the debits did not result into any loss to the respondent.
That contention is the basis ofgrounds 7, 8 and 9 whose substance may for
clarity be recast thus -
That the Court ofAPPeal erred -
. in failing to hold lhat the credits on the shilling accounl were

transfersfrom the dollar occount;

o in holding that the burden was on the appellant to prove that lhe
withdrawals from the said bank accounts were for discharging the

respondent's legal liabilities; and

o failing to hold that the payments from the said accounls were to
in
the respondent's creditors orfor the respondent's beneftt.
There are two prongs in the submissions of counsel for the appellant in
respect of these grounds of appeal. The first is that the respondent had the
burden to prove, not only that the withdrawals from its bank accounts were
in breach of mandate, but also that they resulted in loss to the respondent'
The second is that compensating the respondent for the sums withdrawn
from both accounts would amount to double compensation because the sums
en the shillings accsunt rvere transfers from the dollo' acc.'r'nt

2
With due respect to leamed counsel for the appellant, there is no basis for
the latter prong. I have not found any evidence on record showing the source
ofthe credits on the respondent's shillings account. The only semblance of
such evidence is Exh.D17, whichis a list of debits made on the dollar
account between 13.1.93 and 8.11.95. Out of about 80 debits, 14 are
classified as transfers to the local culrency account, i.e. the shillings account.
In my view, that is not proof that all the sums credited to the shillings
account were sourced from the dollar account'

The court ofAppeal considered the issue ofthe burden ofproof and in my

view rightly held in effect that upon the respondent showing that the
withdrawals from its accounts were made in breach of mandate the burden
shifted to the appellant to prove its claim that the withdrawals were for
discharging the respondent's liabilities or otherwise for the respondent's
benefit, and did not occasion loss. In this regard, the appellant relied mainly
on Exhs. Dl6 and Dl7. The former is a list of debits made on the shillings
account between 6.1.93 and 31.12.96; while the latter as I have
just noted is

the list of debits on the dollar account. The appellant compiled both lists for
the purpose of the suit and while the suit was pending hearing. Both lists
commence from January 1993 apparently because the bank's records for
1992 were destroyed. In my view the lists do not assist the appellant to
discharge its burden to show that the debits were in respect of payments to
discharge the respondent's legal liabilities or otherwise for its benefit. Their

inadequacy may be illustrated in two respects. On both exhibits many debits

are listed with no indication of the signatory that made the payment.
{
secondly none of the listed payments is supported by any invoicTther
evidence to ho that the oavee is a lesitimate credi tor of the respondent.

J
The nearest I would have considered to be acceptable are debits for ledger
fees and other bank charges, but trreffigligible and were not pursued in the
k
submissions.

In conclusion I would hold that the court of Appeal did not err in upholding
the award of damages made to the respondent by the trial court. The
appellant has not made out a case for disallowing or reducing it.

DATED Mengo the I 1

/L day of (s* r 2005.

J.N. Mulenga,
Justice of the Supreme Court.