Access Financial Services PLC Ltd v Khayongo Patricia Rutiba (HCT-00-CC-CS 61 of 2007) [2009] UGCommC 42 (23 September 2009)

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}{\b\insrsid16006560\charrsid12725285 IN THE HIGH COURT OF UGANDA AT KAMPALA \par [COMMERCIAL DIVISION] \par }\pard\plain \s9\qc \li0\ri0\sl360\slmult1\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel8\adjustright\rin0\lin0\itap0\pararsid12725285 \b\f35\fs28\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\f0\fs24\insrsid11734036\charrsid12725285 HCT - 00 - CC - CS - 0061 - 2007 \par }\pard\plain \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\insrsid11734036\charrsid12725285 \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 ACCESS FINANCIAL SERVICES PLC LIMITED}{\b\insrsid11734036\charrsid12725285 }{ \b\insrsid16006560\charrsid12725285 :::::::::}{\b\insrsid11734036\charrsid12725285 ::::::::}{\b\insrsid16006560\charrsid12725285 :::}{\b\insrsid11734036\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 PLAINTIFF \par }{\b\insrsid11734036\charrsid12725285 \par }\pard \ql \fi720\li3600\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin3600\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 VERSUS \par }{\b\insrsid11734036\charrsid12725285 \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 KHAYONGO PATRICIA RUTIBA}{\b\insrsid11734036\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 ::::::::::::::::::::::}{\b\insrsid11734036\charrsid12725285 :::::}{\b\insrsid16006560\charrsid12725285 :::::::::::}{\b\insrsid11734036\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 DEFENDANT \par \par }{\b\insrsid16006560\charrsid12725285 BEFORE}{\b\insrsid11734036\charrsid12725285 :}{\b\insrsid16006560\charrsid12725285 }{\b\insrsid11820862\charrsid12725285 \tab }{\b\ul\insrsid16006560\charrsid12725285 HON JUSTICE GEOFFREY KIRYABWIRE \par }{\insrsid16006560\charrsid12725285 \par }{\insrsid11734036\charrsid12725285 \par }{\b\ul\insrsid16006560\charrsid12725285 J}{\b\ul\insrsid11734036\charrsid12725285 }{\b\ul\insrsid16006560\charrsid12725285 U}{\b\ul\insrsid11734036\charrsid12725285 D }{\b\ul\insrsid16006560\charrsid12725285 G}{\b\ul\insrsid11734036\charrsid12725285 M }{\b\ul\insrsid16006560\charrsid12725285 E}{\b\ul\insrsid11734036\charrsid12725285 }{\b\ul\insrsid16006560\charrsid12725285 N}{\b\ul\insrsid11734036\charrsid12725285 }{\b\ul\insrsid16006560\charrsid12725285 T}{\b\insrsid11734036\charrsid12725285 :}{ \b\ul\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\ul\insrsid16006560\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 The plaintiff, Access Financial Services PLC Limited, a limited lia}{\insrsid3153387\charrsid12725285 bility company brought this case}{\insrsid16006560\charrsid12725285 against the defendant Khayongo Patricia Rutiba, by way of a summary suit seeking payment of Ug. Shs.6,431,211/= (Six million four hundred thirty one thousand two hundred and eleven Uganda shillings), interest and costs of the suit. \par \par The case for the plaintiff is that on the 16}{\super\insrsid16006560\charrsid12725285 th}{\insrsid16006560\charrsid12725285 of March, 2005 the defendant applied for an unsecured personal loan of Ug. Shs.3,750,000/= (Three million seven hundred and fifty thousand Uganda shillings) from the plaintiff for home improvement and that on that same day, the plaintiff entered into a loan agreement with the defendant under which the plaint i ff extended to the defendant an unsecured personal credit facility of Ug. Shs.3,750,000/= repayable together with interest within a period of 24 months by way of monthly installments. The plaintiff accordingly advanced the loan to the defendant upon the ex e cution of the loan agreement. It is the case for the plaintiff that the defendant has neglected and failed to pay the stipulated monthly installments leaving to an outstanding unpaid balance of Ug. Shs.6,431,211/= (Six million four hundred thirty one thous and two hundred and eleven Uganda shillings) and is therefore in breach of the Loan agreement. \par \par The defendant in her writ}{\insrsid277887\charrsid12725285 ten statement of defence denies the claim and avers }{\insrsid16006560\charrsid12725285 that she has never applied for any loan from the plaintiff. The defendant further contends that her former }{\insrsid3153387\charrsid12725285 employer M/S }{\insrsid16006560\charrsid12725285 Pinnarche and Envision Architects Ltd and its directors, applied for staff loans from the plaintiff company to clear staff arrears and that}{ \insrsid3153387\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Pinnarche and Envision Architects Ltd agreed with the defendant that th ey would repay the said loan. The defendant avers that based on this understanding, she signed the loan agreement prepared by the plaintiff together with an official of her employer and also went ahead and received the loan disbursement. }{ \insrsid3153387\charrsid12725285 It is the case for }{\insrsid16006560\charrsid12725285 the }{\insrsid3153387\charrsid12725285 defendant }{\insrsid16006560\charrsid12725285 that it was not until seven (7) months later that the Defendant received a call from the plaintiff informing her that her employers had failed to repay the loan and that she therefore had to pay it personally}{\b\insrsid16006560\charrsid12725285 . }{ \insrsid16006560\charrsid12725285 The defendant therefore contends }{\insrsid3153387\charrsid12725285 that the plaintiff\rquote s actions}{\insrsid16006560\charrsid12725285 a}{\insrsid3153387\charrsid12725285 mounted to a}{ \insrsid16006560\charrsid12725285 misrepresentation of fact pertaining to the payment of salary arrears and that the suit is entirely misconceived, without merit and ought to be dismissed with costs. \par }\pard\plain \s17\qj \li0\ri0\sb100\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 \fs24\cf1\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid16006560\charrsid12725285 The defendant in her written statement of defence }{\insrsid3153387\charrsid12725285 also }{\insrsid16006560\charrsid12725285 raised a counter claim against the plaintiff (the first counter defendant), Pinnarche & Envision Architects Ltd }{ \insrsid3153387\charrsid12725285 (}{\insrsid16006560\charrsid12725285 the second counter defendant}{\insrsid3153387\charrsid12725285 )}{\insrsid16006560\charrsid12725285 , Godfrey Kahangi }{\insrsid3153387\charrsid12725285 (}{ \insrsid16006560\charrsid12725285 the third counter defendant}{\insrsid3153387\charrsid12725285 )}{\insrsid16006560\charrsid12725285 , Godfrey Songa }{\insrsid3153387\charrsid12725285 (}{\insrsid16006560\charrsid12725285 the fourth counter defendant}{ \insrsid3153387\charrsid12725285 )}{\insrsid16006560\charrsid12725285 and Flora Runumi }{\insrsid10553784\charrsid12725285 (}{\insrsid16006560\charrsid12725285 the fifth counter defendant }{\insrsid10553784\charrsid12725285 )}{ \insrsid16006560\charrsid12725285 seeking the payment of the sum of Ug. Shs.6,431,211/= (Six million four hundred and thirty one thousand two hundred and eleven Uganda shillings) as special damages for the amount due under the contract between the first defendant and the other defendants, interest on the amount, general damages and costs. \par }\pard\plain \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid16006560\charrsid12725285 \par The defendant/claimant contends that the first counter defendants who are also the Plaintiff}{\insrsid11734036\charrsid12725285 \rquote }{\insrsid16006560\charrsid12725285 s }{\insrsid11734036\charrsid12725285 employers }{ \insrsid16006560\charrsid12725285 in the matter entered into a contract to benefit the employees of the second counter defendant. That she was not a party to those negotiations and agreement and that the counter defendants misrepresented the contents of their negotiations and agreements which were purportedly meant to benefit the employees of the se cond counter defendant by payment of salary arrears. \par \par }{\insrsid11734036\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 There where no agreed facts at the pre trial conference. \par The agreed issues however were the following; \par }{\insrsid11734036\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid11734036\charrsid12725285 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-540\li900\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin900\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 }{\insrsid16006560\charrsid12725285 Whether there was a valid loan Agreement between the plaintiff company and the defendant? \par }\pard \qj \li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid11734036\charrsid12725285 \hich\af0\dbch\af0\loch\f0 2.\tab}}\pard \qj \fi-540\li900\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin900\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 }{\insrsid16006560\charrsid12725285 Whether the second to fifth counter defendants were parties to the loan agreement? \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid11734036\charrsid12725285 \hich\af0\dbch\af0\loch\f0 3.\tab}}\pard \qj \fi-540\li900\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin900\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 }{\insrsid16006560\charrsid12725285 Whether the first to fifth counter defendants jointly and severally misrepresented the content}{ \insrsid11734036\charrsid12725285 s}{\insrsid16006560\charrsid12725285 and effect of the loan agreement, if any? \par }\pard \qj \li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid11734036\charrsid12725285 \hich\af0\dbch\af0\loch\f0 4.\tab}}\pard \qj \fi-540\li900\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin900\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 }{\insrsid16006560\charrsid12725285 Whether there is liability to pay the debt claimed by the plaintiff? \par }\pard \qj \li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid11734036\charrsid12725285 \hich\af0\dbch\af0\loch\f0 5.\tab}}\pard \qj \fi-540\li900\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin900\itap0\pararsid12725285 {\insrsid11734036\charrsid12725285 }{\insrsid16006560\charrsid12725285 What remedies are available to the parties? \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par Mr. Paul Kut}{\insrsid11734036\charrsid12725285 eesa appeared for the plaintiff}{\insrsid16006560\charrsid12725285 /1}{\super\insrsid16006560\charrsid12725285 st}{\insrsid16006560\charrsid12725285 counter defendant and Mr. R. Mugisha appeared for the defendant/counter claimant while Mr. Timothy Atuhaire appeared for the second to fifth counter defendants}{\insrsid10553784\charrsid12725285 .}{\insrsid16006560\charrsid12725285 The second to fifth counter defendants did not testify in court.

\par \par }\pard \qj \fi-2160\li2160\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin2160\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 I}{\b\insrsid11734036\charrsid12725285 ssue }{\b\insrsid16006560\charrsid12725285 N}{ \b\insrsid11734036\charrsid12725285 o}{\b\insrsid16006560\charrsid12725285 .1:}{\insrsid11734036\charrsid12725285 \tab }{\b\ul\insrsid16006560\charrsid12725285 Whether there was a valid loan Agreement between the plaintiff company and the defendant?

\par }\pard \qj \fi-1440\li1440\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid12725285 {\b\ul\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 Counsel for the plaintiff in his submissions relied on the evidence adduced by Mr}{ \b\insrsid16006560\charrsid12725285 . }{\insrsid16006560\charrsid12725285 John Luberanga}{\b\insrsid16006560\charrsid12725285 }{\insrsid16006560\charrsid12725285 (PW 1) who testified that the Plaintiff was approached by officers of }{ \insrsid10553784\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Pinnarche and Envision Architects Ltd (herein after referred to as the second counter defendant) with a request that the plaintiff e xtends loan services to its employees and that the request was embodied in a letter dated 04}{\super\insrsid16006560\charrsid12725285 th}{\insrsid16006560\charrsid12725285 December, 2004 and marked Exhibit P1. That after carrying out a business analysis on the second counter defendant, the plaintiff entered into an agreement with them for purposes of allowing the plaintiff to market its products to the second counter defendant\rquote s employees and }{\insrsid10553784\charrsid12725285 the company in turn would}{\insrsid16006560\charrsid12725285 carry}{\insrsid14823085\charrsid12725285 }{\insrsid16006560\charrsid12725285 out deductions on the employees\rquote salaries}{\insrsid10553784\charrsid12725285 to pay the }{\insrsid4803483\charrsid12725285 loans in}{\insrsid10553784\charrsid12725285 the event that}{\insrsid16006560\charrsid12725285 loans}{ \insrsid10553784\charrsid12725285 were}{\insrsid16006560\charrsid12725285 advanced to them. \par \par Mr. Luberanga (PW1) further testified that on the 15}{\super\insrsid16006560\charrsid12725285 th}{\insrsid16006560\charrsid12725285 March 2005, the defendant approached the plaintiff and requested for a loan of Ug. Shs.3,750,000/= (Three million seven hundred and fifty thousand Uganda shillings) and that she was also advised to bring a letter of introduction from her employe}{ \insrsid13980763\charrsid12725285 r}{\insrsid16006560\charrsid12725285 , a copy of her identity card, pay slip and bank statement whi}{\insrsid9324104\charrsid12725285 ch she did. The loan was thereafter approved and}{\insrsid16006560\charrsid12725285 she was invited to sign the loan agreement marked Exhibit P5 and the salary deduction authorization for m marked Exhibit P6 which she did. That the loan was subsequently processed and the defendant was advised to pick up the cheque and that she delegated her husband,}{\insrsid9324104\charrsid12725285 Mr. Rutiba who}{\insrsid16006560\charrsid12725285 picked it from the plaintiff\rquote s offices. \par \par It was Mr. }{\insrsid9324104\charrsid12725285 Kuteesa}{\insrsid16006560\charrsid12725285 }{\insrsid9324104\charrsid12725285 (counsel for the plaintiff}{\insrsid4803483\charrsid12725285 ) submission}{\insrsid16006560\charrsid12725285 that the defendant/counterclaimant signed the loan agreement which in this case embodied the contract between the parties. Counsel pointed out that all the essentials of a}{\insrsid9324104\charrsid12725285 contract were fulfilled when}{ \insrsid16006560\charrsid12725285 , the defendant applied for the loan, the plaintiff agreed to grant the loan, the parties signed the agreement and the loan was advanced and received. Counsel}{\insrsid9324104\charrsid12725285 for the }{ \insrsid4803483\charrsid12725285 plaintiff further}{\insrsid16006560\charrsid12725285 submitted that the signing }{\insrsid9324104\charrsid12725285 of the loan agreement }{\insrsid16006560\charrsid12725285 was without any form of coercion or duress and that the defendant was given an opportunity to read the loan agreement before signing it. Counsel also relied on the testimony of the defendant Khayongo Patricia Rutiba who admitted in cross examination that she was literate, a graduate of architecture and could read and write English. He further submitted that it was also her testimony that before signing she had the opportunity to read through the agreeme}{\insrsid9324104\charrsid12725285 nt. Mr. Kuteesa thus referred }{\insrsid4803483\charrsid12725285 court to }{\insrsid16006560\charrsid12725285 the case of}{\insrsid14823085\charrsid12725285 \par \par }\pard \qj \fi75\li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 L\'94ESTRANGE . V. GRACOUB LIMITED [1934] 2 K. B 394}{\insrsid16006560\charrsid12725285 , where }{ \b\insrsid16006560\charrsid12725285 Scrutton L. J.}{\insrsid16006560\charrsid12725285 held that; \par }{\b\insrsid14823085\charrsid12725285 \par }\pard \qj \li1440\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93\'85 When a document containing contractual terms is signed, then , in the absence of fraud, or, I will add, misrepresentation , the party signing it is bound, and it is wholly immaterial whether he has read the document or not.\'94 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par Counsel}{\insrsid9324104\charrsid12725285 for the }{\insrsid4803483\charrsid12725285 plaintiff therefore}{\insrsid16006560\charrsid12725285 submitted, on this issue, that there was a valid and binding loan agreement between the plaintiff company and the defendant. \par \par On the other hand, counsel for the defendant }{\insrsid1924459\charrsid12725285 submitted }{\insrsid16006560\charrsid12725285 that the plaintiff never met the defendant personally in this transaction. He referred to the testimony of Mr. Luberanga (PW1) in cross examination who agreed that at the material time the defendant was on maternity leave, that she never personally approached the plaintiff company for the loan nor did she meet the manager or any of the officials of the plaintiff\rquote s company and that the plaintiff handled the whole transaction with the officials of the second counter defendant}{\insrsid1924459\charrsid12725285 her employer.}{\insrsid16006560\charrsid12725285 \par \par Counsel for the defendant, submitted that the defendant Mrs. Khayongo (DW1) , testified that she was told by her employers that she was going to be paid her salary arrears, but that the employer was going to arrange a salary loan to cover this transaction and that in return the employer would repay loan to the pla intiff company in installments. It was the testimony of Mrs. Khayon}{\insrsid4803483\charrsid12725285 go}{\insrsid16006560\charrsid12725285 that she entered into an agreement with the second counter defendant and that subsequently, her employer }{ \insrsid4803483\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Pinnarche & Envision Architects Ltd went ahead to provide the relevant inform ation to the plaintiff for processing the loans. She further testified that the only physical participation she had in the transaction was signing the loan agreements. \par \par Counsel for the defendant therefore submitted that the real applicant for the loan was the second counter defendant. That the defendant was simply induced to sign a loan document on the false promise that the second counter defendant was going to repay the money using the salary arrears due to the Defendant. Counsel further submitted that t he defendant signed the document due to the representations and undertakings made to her by her }{\insrsid1924459\charrsid12725285 employers that the loan}{\insrsid16006560\charrsid12725285 was in payment of her salary arrears and that they would repay the money advanced to }{\insrsid1924459\charrsid12725285 her. It is the case of the defendant that in the circumstances there was no}{\insrsid16006560\charrsid12725285 a valid contract.

\par \par I have reviewed the submissions of both Counsel on this issue and looked at the evidence adduced. It is quite clear that there was a loan agreement between the plaintiff and the defendant}{\insrsid1924459\charrsid12725285 that was signed by them}{ \insrsid16006560\charrsid12725285 . However the difficulty arises in determining whether this was a valid loan agreement. A review of the loan agreement Exhibit P.5 clearly shows that the agreement is between Access Financial Services (the plaintiff company) and Khayongo Patricia the defen dant. \par \par }\pard \qj \fi720\li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 Lord Denning}{\insrsid16006560\charrsid12725285 in the case of }{ \b\insrsid16006560\charrsid12725285 Solle v Butcher (1950)1KB 671 }{\insrsid16006560\charrsid12725285 held that, \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid14823085\charrsid12725285 \par }\pard \qj \li1440\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93once a contract has been made, that is to say, once the parties whatever their m ost state of mind, have to all outward appearance agreed with sufficient certainty the same terms subject matter, then the contract is good unless and until it has been set a side for breach of some conditions expressed or implied in it for fraud\'85 ..neither party can rely on his own mistake to say it was annulity from the beginning no matter that it was a mistake to which his mind was fundamental\'94 \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 It was the testimony of the defendant Mrs. Khayongo Patricia Rutiba during cross examination, that before signing the agreement she had the opportunity to read through it, as she was literate, a graduate of architecture and could read and write English. } {\insrsid4803483\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 I am satisfied with the plaintiff\rquote s evidence before me through the testimony of Mrs. Khayongo, that when the Defendant was signing the agreement with Access Financial Services Limited, she fully knew and was a ware of the terms and conditions she was binding her self to.}{\i\insrsid16006560\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 \par Mrs. Khayongo signed the Salary Deduction Authorization Form with Financial Services Limited on the 16}{\super\insrsid16006560\charrsid12725285 th}{\insrsid16006560\charrsid12725285 of March 2005, where she agreed under paragraph 2, I quote}{ \insrsid14823085\charrsid12725285 ;}{\insrsid16006560\charrsid12725285 \par }{\insrsid14823085\charrsid12725285 \par }\pard \qj \li1440\ri1080\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin1080\lin1440\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93I further understand and undertake that this is an irrevocable instruction and cannot be cancelled by me until all amounts due have been paid to AFS. Should my employer for any reason not deduct any of the amounts in terms of this request, I shall consider the amounts unpaid and if due undertake to pay AFS such sums.\'94 \par }\pard \qj \li1440\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid12997725\charrsid12725285 The facts in this matter are clear that }{\insrsid8220165\charrsid12725285 in}{ \insrsid16006560\charrsid12725285 accepting }{\insrsid8220165\charrsid12725285 the }{\insrsid16006560\charrsid12725285 terms of t}{\insrsid12997725\charrsid12725285 he Agreement, the defendant }{\insrsid16006560\charrsid12725285 made her self bound to pay the loan should her employer fail to do so. \par \par In answer to issue No.1 therefore, I find that this was a valid loan agreement, entered into between Mrs. Khayongo,}{\insrsid12997725\charrsid12725285 the }{\insrsid4803483\charrsid12725285 defendant on}{\insrsid16006560\charrsid12725285 one part and Access Financial Services PLC Lim}{\insrsid12997725\charrsid12725285 ited, the plaintiff on the other part.}{\insrsid16006560\charrsid12725285 \par \par \par }\pard \qj \fi-2160\li2160\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin2160\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 I}{\b\insrsid14823085\charrsid12725285 ssue}{\b\insrsid16006560\charrsid12725285 N}{ \b\insrsid14823085\charrsid12725285 o}{\b\insrsid16006560\charrsid12725285 .2:}{\insrsid16006560\charrsid12725285 }{\insrsid14823085\charrsid12725285 \tab }{\b\ul\insrsid16006560\charrsid12725285 Whether the 2}{ \b\ul\super\insrsid16006560\charrsid12725285 nd}{\b\ul\insrsid16006560\charrsid12725285 to 5}{\b\ul\super\insrsid16006560\charrsid12725285 th}{\b\ul\insrsid16006560\charrsid12725285 counter defendants were parties to the loan agreement? \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\ul\insrsid16006560\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 On this issue, counsel for the defendant/ counter claimant submitted that the oral evidence adduced by Mr. Luberanga (PW1) that when no remittances were received for seven months, the plaintiff company never notified the defendant, suffices to show that the second counter defendant was a party to the loan agreement. He further submitted that the first agreements, namely that between the plaintiff and the second counter claimant marked Exhibit P.3, which led to the loan agreement were signed by th e officials of the second counter defendant. Counsel for the Defendant made reference to the case of }{\insrsid1719621\charrsid12725285 \par \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 Central London Property Trust Limited .v. High Trees LTD [1947] KB 130}{ \insrsid16006560\charrsid12725285 where court held that; \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qj \li1440\ri1260\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin1260\lin1440\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93 where Parties enter into an arrangement which is intended to create legal relations between them and in pursuance of such an arrangement, one party makes a promise to the other which he knows will be acted upon and which is infa ct acted upon by promise, the court will treat the promise as binding on the promissory to the extent that would allow him to act inconsistently with it even though the promise may not be supported by consideration in strict sense.\'94 \par }\pard \qj \li720\ri1260\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin1260\lin720\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \par }{\i\insrsid1719621\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 Counsel also referred me to section 113 of the Evidence Act Cap 6 which provides that; \par \par }\pard \qj \li1440\ri1260\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin1260\lin1440\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93When a person has by his, declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such a per son or his representative, to deny the truth of that thing.\'94 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par Counsel for the defendant therefore submitted that in the instant case the employer made }{\insrsid4286680\charrsid12725285 a clear}{\insrsid16006560\charrsid12725285 inducement to the defendant and that acting on the inducement, the defendant acquired a loan she had not }{\insrsid4286680\charrsid12725285 in reality }{\insrsid16006560\charrsid12725285 applied for and never needed. \par \par Counsel for the plaintiff in response however submitted that the second to fifth counter defendants were never parties but merely strangers to the loan agreement. Counsel }{\insrsid4286680\charrsid12725285 for the plaintiff }{ \insrsid16006560\charrsid12725285 referred to the loan agreement (Exhibit P5) and submitted that the parties to the agreement are the plaintiff company and the defendant}{\insrsid4286680\charrsid12725285 only}{\insrsid16006560\charrsid12725285 . That the second to fifth counter }{\insrsid4286680\charrsid12725285 defendants are neither named}{\insrsid16006560\charrsid12725285 nor incorporated into the agreement. Counsel for the plaintiff further submitted that the defendant did not adduce any evidence to contradict or vary the express terms of the Loan agreement so as to make or incorporate the second to fifth counter defendants as parties to the contract. \par \par Counsel}{\insrsid4286680\charrsid12725285 for the plaintiff submitted}{\insrsid16006560\charrsid12725285 th at the agreement marked Exhibit P.3 between the plaintiff and the second counter defendant was merely an agreement meant to enable the plaintiff to market its products to the second counter defendant\rquote s employees and to establish a mechanism for recovery of the loans so advanced. That it did not in any way purport to make the second to fifth counter defendants liable under the loan agreement. \par \par This }{\insrsid4286680\charrsid12725285 facts relating to this issue are}{\insrsid16006560\charrsid12725285 very clear. A review of the loan agreement Exhibit P.5 clearly shows that the agreement is }{\b\insrsid16006560\charrsid12725285 ONLY}{ \insrsid16006560\charrsid12725285 between Access Financial Services (the plaintiff company) and Khayongo Patricia the defendant. That being the case, in answer to the current issue, it is therefore my finding that the second to fifth counter defendants were not parties to the loan agreement between Access Financial Services, and Mrs. Khayongo Patricia. \par \par }\pard \qj \fi-2160\li2160\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin2160\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 I}{\b\insrsid1719621\charrsid12725285 ssue}{\b\insrsid16006560\charrsid12725285 N}{ \b\insrsid1719621\charrsid12725285 o}{\b\insrsid16006560\charrsid12725285 .3:}{\insrsid16006560\charrsid12725285 \tab }{\b\ul\insrsid16006560\charrsid12725285 Whether the 1}{\b\ul\super\insrsid16006560\charrsid12725285 st}{ \b\ul\insrsid16006560\charrsid12725285 to 5}{\b\ul\super\insrsid16006560\charrsid12725285 th}{\b\ul\insrsid16006560\charrsid12725285 counter defendants jointly and severally misrepresented the content and effect of the loan agreement, if any? \par }\pard \qj \fi-1440\li1440\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid12725285 {\b\ul\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 It was the submission of Counsel for the plaintiff that in this case, the burden of proving the misrepresentation lay on the defendant.}{\insrsid4286680\charrsid12725285 That the defendant did}{\insrsid14441776\charrsid12725285 not adduce}{\insrsid16006560\charrsid12725285 any evidence to this effect. Counsel for the plaintiff further submitted that even if the misrepresentation wa s present which is a fact the plaintiff denied, the defendant did not adduce any evidence to show that such misrepresentation infact induced the defendant to enter into the loan agreement. \par \par Counsel for the defendant, in his response to Counsel for the plaintiff\rquote s submission, submitted that the defendant was induced to receive the loan in the belief that the money was a payment for salary arrears, and that the second counter defendant was going to repay the loan with interest. Counsel further }{ \insrsid1719621\charrsid12725285 submitted}{\insrsid16006560\charrsid12725285 that the representation did not have to be put into the loan agreement as a term. That the promises made by the second to fifth counter defendants that the loans were for the payment of salary arrears and would be repaid by them induced the defendant to sign the loan agreement. Counsel thus submitted that this amounted to a misrepresentation. \par \par The second, third, fourth and fifth counter defendants in their }{\insrsid4286680\charrsid12725285 pleaded }{\insrsid16006560\charrsid12725285 response to the counter claim aver that they did not participate in any misrepresentation or conc ealment and neither were they aware of the existence of any between the counter claimant/defendant and the plaintiff/ first counter defendant. They further state that the loan agreement which the counter claimant/ defendant signed was a willful and volunt ary deed and that she is not entitled to payment by the defendants of general and special damages as claimed. \par \par I have addressed my mind to the arguments of both counsel and the evidence of the parties in this case so I will now proceed to discuss the law relating to misrepresentation. \par \par A misrepresentation has been defined by }{\b\insrsid16006560\charrsid12725285 Cheshire, Fifoot and Furmston\rquote s}{\insrsid16006560\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 in The Law of Contract}{\insrsid16006560\charrsid12725285 }{ \b\insrsid16006560\charrsid12725285 14}{\b\super\insrsid16006560\charrsid12725285 th}{\b\insrsid16006560\charrsid12725285 edition,}{\insrsid16006560\charrsid12725285 as }{\insrsid1719621\charrsid12725285 a representation that is untrue}{ \insrsid16006560\charrsid12725285 .}{\insrsid1719621\charrsid12725285 }{\insrsid16006560\charrsid12725285 It is not that every statement made to a party to a contract, will amount to misrepresentation so as to entitle the representee to relief. \par \par Further}{\b\insrsid16006560\charrsid12725285 Cheshire, Fifoot and Furmston\rquote s}{\insrsid16006560\charrsid12725285 at pages 298-300, states that for a statement to amount to misrepresentation it must; \par }{\insrsid1719621\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid16006560\charrsid12725285 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-540\li1260\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1260\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 be a statement of an existing fact i.e. must not be a statement of opinion or law \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\insrsid1719621\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid16006560\charrsid12725285 \hich\af0\dbch\af0\loch\f0 2.\tab}}\pard \qj \fi-540\li1260\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1260\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 must be intended to induce the misrepresentee to enter into the contract \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\insrsid1719621\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid16006560\charrsid12725285 \hich\af0\dbch\af0\loch\f0 3.\tab}}\pard \qj \fi-540\li1260\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1260\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 statement must have actually induced the representee to enter into the contract \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\insrsid1719621\charrsid12725285 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid1719621\charrsid12725285 \hich\af0\dbch\af0\loch\f0 4.\tab}}\pard \qj \fi-540\li1260\ri0\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1260\itap0\pararsid12725285 {\insrsid1719621\charrsid12725285 t}{\insrsid16006560\charrsid12725285 he representation must be material. \par }\pard \qj \li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 They further state that a misrepresentation is legally harmless if the plaintiff never knew of its existence, or did not allow it to affect his judgment or was aware of its untruth. \par Through the evidence given before me, it is my finding that Mrs. Khayongo Patricia believed that}{\insrsid4286680\charrsid12725285 her employers M/S}{\insrsid16006560\charrsid12725285 Pinnarche and Envision Architects}{\insrsid4468645\charrsid12725285 }{\insrsid7628478\charrsid12725285 Ltd were}{\insrsid16006560\charrsid12725285 going to repay the loan }{\insrsid4468645\charrsid12725285 using her salary arrears }{\insrsid16006560\charrsid12725285 as they had promised her and it is on this representation that she accepted to take the loan. The representation made to her}{\insrsid7628478\charrsid12725285 thus}{\insrsid16006560\charrsid12725285 in every sense met the requirements of w hat amounts to a misrepresentation. \par \par It was the holding of court in the case of }{\b\insrsid7628478\charrsid12725285 Gross v Lewis Hillman }{\b\insrsid16086800\charrsid12725285 L}{\b\insrsid7628478\charrsid12725285 td [}{\b\insrsid16086800\charrsid12725285 1}{ \b\insrsid7628478\charrsid12725285 970]}{\b\insrsid16006560\charrsid12725285 CH 445 }{\insrsid16006560\charrsid12725285 that in testing the honesty of the representor\rquote s belief, his statement must not be considered according to its ordinary meaning but according to the meaning understood by him.}{\b\insrsid16006560\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 It was the evidence of Mrs. Khayongo Patricia that when she signed the loan agreement with }{\insrsid7040125\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Acc}{\insrsid7628478\charrsid12725285 ess Financial Services Limited}{\insrsid14441776\charrsid12725285 she belived that her}{\insrsid13924994\charrsid12725285 employers would pay it back using the arrears of salary they owed }{\insrsid7040125\charrsid12725285 her. }{ \insrsid13980763\charrsid12725285 I}{\insrsid7040125\charrsid12725285 t was still her testimony that when M/S Access Financial Services Limited started making dem}{\insrsid16006560\charrsid12725285 ands for repayment she had informal meetings with the directors of }{\insrsid7040125\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Pinnarche and Envision Architects Ltd who reassured her that they would repay the loan which they did not do up to date. \par \par }\pard \qj \li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 Justice }{\b\insrsid16006560\charrsid12725285 Yorokamu Bamwine}{\insrsid16006560\charrsid12725285 in the case of }{\b\ul\insrsid1719621\charrsid12725285 Esther Sempebwa}{\b\insrsid1719621\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 v }{\b\ul\insrsid16006560\charrsid12725285 The Non Performing Assets Recovery Trust}{ \b\insrsid16006560\charrsid12725285 HCT-}{\b\insrsid1719621\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 00}{\b\insrsid1719621\charrsid12725285 - }{\b\insrsid16006560\charrsid12725285 CC}{\b\insrsid1719621\charrsid12725285 - }{ \b\insrsid16006560\charrsid12725285 CS}{\b\insrsid1719621\charrsid12725285 - }{\b\insrsid16006560\charrsid12725285 0954}{\b\insrsid1719621\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 -}{\b\insrsid1719621\charrsid12725285 }{ \b\insrsid16006560\charrsid12725285 2004 }{\insrsid16006560\charrsid12725285 held that;}{\b\ul\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qj \fi360\li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93}{\i\insrsid16006560\charrsid12725285 It is trite law that a representation is not a term, but a statement of fact made}{\i\insrsid1719621\charrsid12725285 \par }{\i\insrsid16006560\charrsid12725285 by one party, to the other, during their preliminary negotiations, which was}{\i\insrsid1719621\charrsid12725285 \par }{\i\insrsid16006560\charrsid12725285 intended to induce the other party, to enter into the contract and which did so}{\i\insrsid1719621\charrsid12725285 \par }{\i\insrsid16006560\charrsid12725285 induce the other party, to enter into that contract. \'93 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 From the facts of the case before me it is evident that in accepting to take up the loan from }{\insrsid7040125\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Access Financial Services Ltd, Mrs. Khayongo Patricia honestly believed that }{\insrsid15099176\charrsid12725285 her employers }{\insrsid7040125\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Pinnarche and Envision Architects Ltd was going to pay it off }{\insrsid15099176\charrsid12725285 as }{\insrsid16006560\charrsid12725285 stated in her testimony. It is not a disputed fact that }{\insrsid7040125\charrsid12725285 M/S }{ \insrsid16006560\charrsid12725285 Pinnarche and Envision Architects Ltd was undergoing some difficulties and entered into an understanding with }{\insrsid7040125\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Access Financial Services to advance them a sum of money under salary loans to cover salary arrears that }{\insrsid15099176\charrsid12725285 they,}{\insrsid7040125\charrsid12725285 M/S }{\insrsid16006560\charrsid12725285 Pi nnarche and Envision Architects Ltd, had failed to }{\insrsid15099176\charrsid12725285 pay. }{\insrsid14441776\charrsid12725285 The}{\insrsid4523028\charrsid12725285 second to fifth counter defendants did not }{\insrsid15099176\charrsid12725285 testify or}{\insrsid4523028\charrsid12725285 adduce evidence to rebut this.}{\insrsid16006560\charrsid12725285 \par }{\insrsid4523028\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 }{\insrsid4523028\charrsid12725285 The evidence on record shows that }{\insrsid16006560\charrsid12725285 Mrs. Khayongo Patricia was not involved in the process of applying for the loan because at that time she was on maternity leave and was told that her arrears were going to be paid through a scheme organized by the company and she would be notified when it was ready and called in to sign the relevant documents. She was just told as a fact that everything had been set up, that she could not change anything; she just had to sign two cont racts; one with the second counter Defendant to show that they would pay back the loan and one with the Plaintiff to allow her to be able to access the money. \par \par She further testified that the second counter Defendant explained to her upon inquiry about their subsequent failure to remit the money to the Plaintiff, that they had had several meetings with the management of the Plaintiff company and that they were going to pay back the money when they got it and that she, among others, was not to worry about anything, and should continue working. \par \par It is my finding that the second counter defendant, who was the employer of the defendant together with the third, fourth and fifth counter defendants, who were the directors of the second counter defendant jointly and severally misrepresented the content and effect of the loan agreement when they represented to the defendant that they were going to pay back the loan as they had promised.}{\insrsid1719621\charrsid12725285 From a procedural point, it would have been better for the Defendant/Counterclaimant to have applied for the second to fifth Defendants to have been added to the suit as third parties to indemnify her under Order 1 rule 14 instea d of bringing this counterclaim. That notwithstanding, misrepresentation is not part of a contract at all (see Hodgin Law of Contract in East Africa 2006 Ed, P. 113). It is an equitable remedy and the maxim }{\i\insrsid1719621\charrsid12725285 \'93 equity will not suffer a wrong to be without a remedy}{\i\insrsid16086800\charrsid12725285 shall be applied in this situation}{\i\insrsid1719621\charrsid12725285 \'94}{\insrsid1719621\charrsid12725285 . The second to fifth counter Defendants in my finding should make good their misrepresentation.}{\insrsid16006560\charrsid12725285 \par \par However I find that the first counter defendant who is also the plaintiff in this case did not misrepresent any co ntent and effect of the loan agreement to the defendant since they only met when she was signing the loan agreement which she accepts to have read and understood before signing. \par \par }{\insrsid16264413\charrsid12725285 \par \par \par \par \par }\pard \qj \fi-2160\li2160\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin2160\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 I}{\b\insrsid15477093\charrsid12725285 ssue}{\b\insrsid16006560\charrsid12725285 N}{ \b\insrsid15477093\charrsid12725285 o}{\b\insrsid16006560\charrsid12725285 .4:}{\insrsid16006560\charrsid12725285 }{\insrsid15477093\charrsid12725285 \tab }{\b\ul\insrsid16006560\charrsid12725285 Whether there is liability to pay the debt claimed by the plaintiff? \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\ul\insrsid16006560\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 Counsel for the plaintiff on this issue submitted that the existence and quantum of the debt claimed by the plaintiff was not disputed by the defendant or the second to the fifth counter defendants. That neither was it disputed that the debt aro se from the loan agreement. Counsel therefore submitted that there is liability to pay the debt and that liability falls on the defendant. \par \par Counsel for the defendant however submitted that since the evidence showed that the second counter defendant company had guaranteed that it would repay the loan and that no salaries were actually ever paid to the defendant, it would remain only fair that the third to fifth counter defendants be held liable to repay the money. \par }{\insrsid11800081\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 In the case of }{\insrsid11800081\charrsid12725285 \par \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\b\ul\insrsid16006560\charrsid12725285 Printing and Numerical Registering Company }{\b\insrsid16006560\charrsid12725285 v }{ \b\ul\insrsid16006560\charrsid12725285 Sampson}{\b\insrsid16006560\charrsid12725285 (1875) LR 19 Eq 462, Sir George Jessel}{\insrsid16006560\charrsid12725285 said, \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93if there i s one thing more than the other that public policy requires is that a man of full age and competent understanding should have the utmost liberty to contract and that their contract when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice.\'94 \par \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 I therefore }{\insrsid16086800\charrsid12725285 find}{\insrsid16006560\charrsid12725285 that there is a debt to be paid since the plaintiff and the defendant entered into a contract which is binding on both parties, the defendant is liable to pay the debt. }{\i\insrsid16006560\charrsid12725285 \par }{\insrsid16006560\charrsid12725285 \par }{\b\insrsid16006560\charrsid12725285 I}{\b\insrsid11800081\charrsid12725285 ssue}{\b\insrsid16006560\charrsid12725285 N}{\b\insrsid11800081\charrsid12725285 0}{\b\insrsid16006560\charrsid12725285 .5:}{\insrsid16006560\charrsid12725285 }{ \insrsid11800081\charrsid12725285 \tab }{\b\ul\insrsid16006560\charrsid12725285 What remedies are available to the parties? \par }{\insrsid16006560\charrsid12725285 \par The plaintiff prayed for the payment of Ug. Shs.6, 431,211 (Six million four hundred thirty one thousand two hundred and eleven Uganda shillings) which is the principal sum of the loan, payment of interest at commercial rate of 25% and costs of the suit.

\par \par The defendant in her counter claim prays for payment of the sum of Ug. Shs.6,431,211/= (Six million four hundred and thirty one thousand two hundred a nd eleven Uganda shillings) as special damages for the amount due under the contract between the first defendant and the other defendants, interest on the amount, general damages and costs. \par \par In the case of }{\insrsid11800081\charrsid12725285 \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\b\ul\insrsid16006560\charrsid12725285 Coffee Marketing Board}{\b\insrsid16006560\charrsid12725285 v }{ \b\ul\insrsid16006560\charrsid12725285 Kigezi Growers Cooperative Union}{\b\insrsid16006560\charrsid12725285 H}{\b\insrsid2260074\charrsid12725285 .}{\b\insrsid16006560\charrsid12725285 C}{\b\insrsid2260074\charrsid12725285 .}{ \b\insrsid16006560\charrsid12725285 C}{\b\insrsid2260074\charrsid12725285 .}{\b\insrsid16006560\charrsid12725285 S }{\b\insrsid2260074\charrsid12725285 N}{\b\insrsid16006560\charrsid12725285 o.}{\insrsid16006560\charrsid12725285 }{ \b\insrsid16006560\charrsid12725285 437/1994}{\insrsid16006560\charrsid12725285 court held that \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qj \li1440\ri1080\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin1080\lin1440\itap0\pararsid12725285 {\i\insrsid16006560\charrsid12725285 \'93 Even if it were to be held that the loan agreement was illegal, when the parties to an agreement are not in pari delicto, the defendant should still repay the money as had and received}{\insrsid16006560\charrsid12725285 \'94 \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 Since the Defendant signed the loan agreement personally with the Plaintiff, it is my finding that she should pay the money she owes them.}{\insrsid4523028\charrsid12725285 The plaintiff/first counter defendant is not awarded general damages as they did not pray for them}{ \insrsid16006560\charrsid12725285 \par \par }{\insrsid11800081\charrsid12725285 On the other hand s}{\insrsid16006560\charrsid12725285 ince the second,}{\insrsid11800081\charrsid12725285 }{\insrsid16006560\charrsid12725285 third,}{\insrsid11800081\charrsid12725285 }{ \insrsid16006560\charrsid12725285 fourth and fifth counter defendants misrepresented to the defendant the terms and contents of the loan agreement I find them liable in this respect and I order that they pay the defendant the equivalent of the principal sum which the Defendant curren tly owes to the Plaintiff. \par \par The Defendant in her counterclaim prayed for general damages for breach of contract and inconvenience by the Counter Defendants. In her testimony before Court, the Defendant testified that she received numerous phone calls from the Plaintiff Company regarding her indebtedness. In addition, when she inquired from her employers, the Counter Defendants, they promised to repay the amounts due to the Plaintiff before the latter took court action against her. Unfortunately, the count er Defendants reneged on that promise and the Defendant has ended up in courts of law. \par \par It is trite law that general damages}{\b\insrsid16006560\charrsid12725285 }{\insrsid16006560\charrsid12725285 are a pecuniary compensation given on proof of a wrong or breach. In the case of}{\b\insrsid16006560\charrsid12725285 }{ \b\ul\insrsid16006560\charrsid12725285 Dr. Denis Lwamafa}{\b\insrsid2260074\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 v }{\b\ul\insrsid16006560\charrsid12725285 Attorney General}{\b\insrsid16006560\charrsid12725285 H. C. C. S No. 79 of 1983 }{ \insrsid16006560\charrsid12725285 Court held that the plaintiff who suffered damage due to wrongful act of the defendant must be put in the position he would have been had he not suffered the wrong. \par \par Court was not guided on the quantum to be given for general damages by the defendant. Court is therefore left to exercise its }{\insrsid14441776\charrsid12725285 discretion}{\insrsid16006560\charrsid12725285 in determining the amount of general damages to be awarded. I therefore award Ug. Shs.1,000,000/= (one million Uganda shillings) as general damages for the inconvenience caused to the defendant }{\insrsid4523028\charrsid12725285 payable }{ \insrsid16006560\charrsid12725285 by }{\insrsid4523028\charrsid12725285 each of }{\insrsid16006560\charrsid12725285 the, second, third, fourth and fifth counter defendants. \par \par Regarding the question of interest, the Plaintiff prayed for interest at Court rate from the date of judgment till payment in full. The Defendant prayed for interest on the principal su m and the award of general damages at a rate above 25% per annum from the date of judgment till payment in full. \par \par }\pard \qj \fi720\li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\cf1\insrsid16006560\charrsid12725285 Lord Denning}{\cf1\insrsid16006560\charrsid12725285 in }{ \b\ul\cf1\insrsid16006560\charrsid12725285 Waller Steiner V Moir}{\b\cf1\insrsid16006560\charrsid12725285 [1975] 1 QB 373}{\cf1\insrsid16006560\charrsid12725285 at p.388 said: \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\cf1\insrsid16006560\charrsid12725285 \par }\pard \qj \li1440\ri1260\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin1260\lin1440\itap0\pararsid12725285 {\i\cf1\insrsid16006560\charrsid12725285 \'93}{\i\cf1\insrsid16006560\charrsid12725285 In addition, in equity interest is awarded whenever a wrong doer deprives a company of money which it needs for use in its business. It is plain that the company must be compensated for the loss thereby occasioned to it. Mere replacement of the money \endash years later \endash is by no means adequate compensation, especially in days of inflation. The company should be compensated by the award of interest.\'94 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\cf1\insrsid16006560\charrsid12725285 \par }{\cf1\insrsid16006560\charrsid12725285 In addition, it is a firmly established principle that an award of interest is made at the discretion of court. In accordance with the said principles, the Plaintiff Company has been deprived of its money for way over two years and is entitled to interest on the principal sum at a rate of 25% per annum from the date of }{\cf1\insrsid2260074\charrsid12725285 filing until }{\cf1\insrsid16006560\charrsid12725285 payment in full. \par \par }{\cf1\insrsid2260074\charrsid12725285 Equally t}{\cf1\insrsid16006560\charrsid12725285 he Defendant shall also have interest at the same rate }{\cf1\insrsid2260074\charrsid12725285 and for the same period }{\cf1\insrsid16006560\charrsid12725285 on the principal sum and }{\cf1\insrsid2260074\charrsid12725285 on the }{\cf1\insrsid16006560\charrsid12725285 award of general damages from the date of judgment }{\cf1\insrsid2260074\charrsid12725285 un}{\cf1\insrsid16006560\charrsid12725285 til payment in full. \par \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\insrsid16006560\charrsid12725285 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85 \par Geoffrey Kiryabwire \par JUDGE \par }{\b\insrsid2260074\charrsid12725285 \par }{\b\insrsid16006560\charrsid12725285 Date}{\b\insrsid2260074\charrsid12725285 :}{\b\insrsid2182274\charrsid12725285 }{\b\insrsid16006560\charrsid12725285 }{\b\ul\insrsid2182274\charrsid12725285 24/09/2009}{\b\insrsid16006560\charrsid12725285 \par }\pard \qj \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid12725285 {\insrsid16006560\charrsid12725285 \par }{\insrsid2182274\charrsid12725285 \par \par \par \par \par \par \par \par \par \par \par }{\insrsid16086800\charrsid12725285 \par \par \par }{\insrsid2182274\charrsid12725285 \par \par \par \par \par }\pard\plain \s19\qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 \f35\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\f0\insrsid2182274\charrsid12725285 \par }\pard\plain \s20\ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 \i\f35\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\i0\f0\insrsid2182274\charrsid12725285 24/09/09 \par 9:40am \par }{\b\i0\f0\insrsid2182274\charrsid12725285 \par }{\b\i0\f0\ul\insrsid2182274\charrsid12725285 Judgment read and signed in open court in the presence of; \par }{\i0\f0\insrsid2182274\charrsid12725285 \par {\listtext\pard\plain\s20 \f1\lang1033\langfe1033\langnp1033\langfenp1033\insrsid2182274\charrsid12725285 \hich\af1\dbch\af0\loch\f1 -\tab}}\pard \s20\ql \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin1080\itap0\pararsid12725285 {\i0\f0\insrsid2182274\charrsid12725285 P. Kutesa for plaintiff /1}{\i0\f0\super\insrsid2182274\charrsid12725285 st}{\i0\f0\insrsid2182274\charrsid12725285 Counter Defendant \par {\listtext\pard\plain\s20 \f1\lang1033\langfe1033\langnp1033\langfenp1033\insrsid2182274\charrsid12725285 \hich\af1\dbch\af0\loch\f1 -\tab}Rose Emeru \endash Court Clerk \par }\pard \s20\qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 {\b\i0\f0\insrsid2182274\charrsid12725285 \par \par \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85 \par Geoffrey Kiryabwire \par JUDGE \par \par \par Date: }{\b\i0\f0\ul\insrsid2182274\charrsid12725285 24/09/2009}{\b\i0\f0\insrsid2182274\charrsid12725285 \par }\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12725285 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid16006560\charrsid12725285 \par }}