Bank of Uganda v Nsereko and 2 Others (Civil Appeal 72 of 2000) [2001] UGCA 31 (3 December 2001)

Full Case Text

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA **AT KAMPALA**

## CORAM: HON. JUSTICE G. M. OKELLO, JA HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA HON. JUSTICE . A. TWINOMUJUNI. JA

## CIVIL APPEAL NO. 72 OF 2000

## **BETWEEN**

#### BANK OF UGANDA :::::::::::::::::::::::::::::::::::

## AND

| 1. NSEREKO JOSEPH | | | |-------------------|-----------|--| | 2. KISUKYE SARAH | ) | | | 3. HAJJI MUNGI | | |

(Appeal from the Judgment of the High Court of Uganda (Magezi, Ag. J) dated 12/9/2000 at Kampala in Civil Suit No. 961 of 1998)

# JUDGMENT OF G. M. OKELLO, JA

This is an appeal against the decision of the High Court. (Magezi, Ag. J) whereby it gave judgment for the respondents for special and general damages with costs and interest on the decretal amount at Court's rate from the date of judgment.

The appeal stemmed from a representative action which arose as under $On$ 1.11.94. the appellant's Governor, desirous to restructure the appellant with a view to reducing its employees to make it cost effective. issued a circular Exh. P I A. offering a compensatory package to those staff that were willing to voluntarily terminate their services to the appellant or those who were willing to opt for early

retirement from the appellant's employment. Several staffs took the offer and left the Bank. However, an initial dispute arose on the interpretation of the circular Exh. P I A as to whether it entitled the appellant to deduct from the respondents packages all loans including the housing loans taken by the respective respondents. The dispute was resolved by the Supreme Court in Civil Appeal No. 3 of 1998, Bank of Uganda vs Fred Masaba and 3 others (scu) where the court held that the circular precluded deduction of housing loans from the respondents' packages as they were recoverable by other means.

A further dispute, which is the subject of this appeal, arose as to whether the circular entitled the respondents who left the Bank of Uganda under the voluntary termination of services or early retirement scheme. in addition to the severance packages paid to them, also to pension dues under the appellant's Retirement Benefit Scheme. Exh. P I C. In her judgment delivered on 12-9-2000. Magezi. Ag. J. the trial judge held that the circular entitled the respondents to the pension dues in addition to their severance packages. Following that decision, the learned trial judge treated the pension dues as special damages and ordered that they be paid to the respondents. She also awarded general damages to the respondents with costs and interest on the decretal amount at court's rate from the date of judgment till payment in full. It is against this decision and orders that this appeal was brought.

The memorandum of appeal contains eleven grounds which are couched as under:

$\overline{a}$

(1) the learned trial judge erred in law and in fact in holding that it was a term from the contract of voluntary termination of services/early retirement, entered into between the appellant and the respondents,

I that the respondents \*ould in addition to pat ment of the agreed emoluments. receir e pension dues under the Retirement Benefits Scheme Trust Deed and Rules uhether or not thev qualified for pension.

- (2) the learned trial judge erred in lat and in fact in holding that the Retirement Benefits Scheme Trust Deed and Rules \*ere amended bv the appellant's voluntan termination/earl1 retirement circular dated the l " \ovember. 199-1 in respect of eligibilitr for pension. - (3) the learned trial judge erred in lau and in fact in holding that the T rustees appointed b1 Retirement Benefits Scheme Trust Deed and Rulcri r\*ere not independent and \*ere subject to appellant's direction and control. - (4) the learned trial judge erred in la\* in relling on the Supreme ('ourt Judgment in ('ivil .\ppeal \o. J of 1998 in deciding the question of fact as to \*hether the appellant's circular of l" \ovember. 1994 contained a representation or r,r arrantv to the effect that the Respondents r,rould be paid pension dues. - (5) the learned trial judge erred in lau in dealing \*ith the unpleaded and unframed issues of negligent misrepresentation in tort rlhich issue \*as time barred as against the appellant and in deciding the case on the basis of this issue. - (6) in the alternative to ground 5 abore. the Iearned trial judge erred in la\* and in fact in holding that the appellant represented to the

respondents that they would be entitled to their pension dues upon taking voluntary termination/early retirement,

- the learned trial judge erred in law and in fact in holding that $7.$ the appellant was liable in tort for negligent misrepresentation. - the learned trial judge erred in law and in fact in holding 8. that Rules 16 and 17 of the Retirement Benefits Scheme Trust Deed and Rules were applicable to the suit and in relying on them for decision, - $9.$ the learned trial judge erred in law and in fact in holding that the respondents had a cause of action against the appellant in relation to the pension dues under the Retirement Benefits Scheme Trust Deed and Rules. - $10.$ the learned trial judge erred in law and in fact in awarding the respondents special damages for the monthly pension annuity and, - 11. the learned trial judge erred in law and in fact in awarding special damages that had not been quantified, specifically pleaded nor specifically proved.

These grounds were argued in six blocs as follows:-

Grounds 1 and 2; 3 and 9; 4; 5, 6 and 7; 8 and 10 and 11.

$\overline{+}$

Grounds 1 and $2$ :-

The gist of the complaint in these two grounds is that the trial judge erred to hold that the circular Exh. P I A amended rule 6 of the Bank of Uganda Retirement Benefits Trust Deed and Rules (herein after referred to as the Trust Deed) entitling the respondents to pension dues in addition to their severance packages.

Mr. Masembe Kanverezi, learned counsel for the appellant, contended that the circular dealt with two categories of pensionable staff: firstly those who were of and above the age of 50 and secondly those who were below that age. He submitted that under the voluntary termination of service (VTS) early retirement (ER) Scheme hatched out by the circular, these categories could apply for V. T. S. or ER. Those who were of or above the age of 50 if their applications were accepted, would take their severance packages in addition to their pension under the early retirement scheme allowed under rule 6 of the Retirement Benefits Trust Deed and Rules. Those below that age would take only their severance packages. He contended that rule 4 of the Trust Deed limits the right to amend the Trust Deed only to the Trustees. He submitted that the circular therefore, did not amend the Trust Deed as the appellant had no such power.

On the other hand, in their written submission, counsel for the respondents contended that under the voluntary termination of services early retirement scheme contained the circular Exh. $P \perp A$ , all pensionable staffs were eligible to apply for voluntary termination of services (early retirement) irrespective of age or rank. In their view, this was an innovation of the current personnel policies which restricted early retirement age to 50 and above. They argued that since the appellant and the Trustees could amend the Retirement Benefits Scheme of the appellant as per rule

4 of the Deed, the creation in the circular of the exception to the ages and rank requirement, the appellant had effected amendment to the Retirement Benefits Trust Deed. They submitted that the trial judge was therefore, justified to hold so. They further contended that since the respondents were pensionable staffs who retired early under the scheme offered in the circular, they were all entitled to pension dues in addition to their severance packages irrespective of their age or rank. They submitted that the trial judge was therefore, justified to invoke rule 6 of the Trust Deed to find that the respondents were entitled to their pension dues in addition to their severance packages.

In her judgment, the learned trial judge held that the circular letter Exh. P 1 A in paragraph 3 amended rule 6 of the Trust Deed by removing the age restriction for eligibility for pension since under rule 4 of the Trust Deed, the appellant held the key to amendment of the Trust Deed.

In my view, whether the circular letter entitled the respondents to pension dues in additions to their severance packages irrespective of their age and rank is dependent on the construction placed on the document. Similarly whether rule 4 of the Trust Deed empowers the appellant to amend the Deed also depended on the construction of that rule. It is therefore, necessary for ease of reference to reproduce here the circular letter and rule 4 of the Trust Deed.

$\epsilon$

The Circular reads:-

## "Ref. G. O.19

# Re: **Bank of Uganda Restructuring Programme Early Retirement/Voluntary Termination of Service.**

In my Circular Ref: G. O. 19 dated 21st September, 1994, I outlined the nature of the difficulty the Bank was experiencing to meet its operation costs at the current rate and informed you that the Board of Directors had approved a Business Plan which would result in restructuring the Bank with the objective of reducing its operating expenditure to match its income.

I also communicated to you the Board's decision to work out a **Compensatory Package to be offered to staff who may wish to voluntarily** terminate their services to the Bank or opt for early retirement.

Under current Personnel Policies, a staff is eligible for early retirement if he or she is 50 years or above. However, all pensionable staff will be eligible to apply for voluntary termination of service irrespective of age or rank. Staff on temporary and contractual employment are not eligible to apply for this Acceptance of an application shall be at the discretion of the facility. Board.

To facilitate the resettlement of staff who will elect to leave the Bank under early retirement and or voluntary termination of service scheme, the Board of Directors has decided to pay the following compensation package:

- l. One month's gross salar.r per ]ear of senice - 2. Earll Retirement:

- (a) 6 months of gross salan' for those 50 lears and older. nith l5 or more Iears of sen ice. - (b) 3 months of gross salar.r' for those 45 y'ears and older. with l0 or more vears of sen ice. - J. Long Sen ice:

2months gross pa] for those with lll 1'ears sen ice and aged 50. increasing br'2 months per vear to a marimum of l2 months at the age of 55.

{. .{,djustment .{llo\*ance:

20'%, of trro )eara gross earnings. Provident Fund contributed b1 both the emplol'ee and Banli three months par in lieu of notice and accumulated leare \*ill also be paid as an additional separate settlement.

5. Staff Indebtedness to the Bank:

The Bank shall have the right to off-set all penonal loans. other than housing loans. granted to emplol'ees leaving the Bank under this compensatoe package. Hor,rever. anv housing loan rvhich is currentll secured br hvpothecation of \lailo land ('ertificate or l.easehold deposited rrith the BanL shall be registered as a legal O \tortgage loan to be repaid orer a period to be agreed bet\*een the Bank and each emplovee concerned before departure.

6. Income Tax:

Tax pa1'able on the package rrill be met bl the Bank The purpose of this Circular is to invite pensionable staff who rr ish to appll for earl1. retirement and/or voluntan' termination of sen ices to the Bank under this Scheme to do so b1 submitting their applications to .{g. Executive Director {dministration not later than J0'h \orember. 199-1.

## Signed: C. \. Kikonlogo Coverno r-

Rule -1 of the Trust Deed rs couched 1lg f6llou tns u ords:

> \*The trustees mav nith the consent of the emplovers from time to time br deed amend the prorisions of this Trust Deed and ali or anr of the Rules provided that no such amendment shall authorise the applications of anl of the monel's held or to be held b1 the Trustees for anl purpose other than the benefit of the membem or such other persons as hereinafter provided except in certain circumstances on the determination of the said trust as provided in the Rules and provided that no such amendment shall be made so as to affect adversell the rights or interests alreadl set'u red for an .{nnuitant or member sare in so far as ma\ be entailed in securing the approral or continued

t approval of the Scheme b1 the ('ommissioner General of lncome Tar as a Pension Fund under Section l5 East .\frican Income Tar \lanagement .\ct 1958 or an) Statutor.r' modification or rernactment thereof for the time being in force and that no amendment shall be made which would cause the main purpose of the scheme to cease to be the provision of annuities for members on retirement.'

Lord Blackburn once stated rn London and India Docks (-ompanl' \'s Thames Steam Tug and Another ( I908) HL l5 that:-

"The tribunal that has to construe an .{ct of a legislative or indeed an1 other document has to determine the intention as expressed bl the \*ords used. .{nd in order to understand those uords it is material to inquire what is the subject mafter with respect to which thel are used and the obiett in vier+ "

ln the rnstant. the purpose of Erh P I A uas to rn\rte pensronable staff to roluntarrlr leare the Bank rn order to reduce rts uorkfbrce and thus cul do\4n lts operatron costs Counsel for the respondents submrtted that pavment ofpensron on earl'r retrremenl \4 as a term of the nerr Scheme I do not u rth respect. agree The crrcular letter Erh P I A abore rs clear Paragraph I thereof shous that the compensaton package uas the rntended general offer to tuo categories of pensronable staff of Bank of Uganda:

- l. those staff \*ho ma1' \*ish to roluntarilv terminate their sen'iceri to the Bank and - 2. those staff n'ho mar' \*ish to opt for earlv retirement.

Paragraph 3 sounded a warning regarding those who may wish to opt for early retirement that under the current personnel policies only those aged 50 and above were eligible. The paragraph explains however, that the new scheme allows all pensionable staff irrespective of age or rank to apply for voluntary termination of service. The words "**early retirement**" were left out of this explanation. This was significant and deliberate. The obvious reason for it is that "early retirement" was not intended to apply to all pensionable staff irrespective of age or rank since the objective of the scheme was to cut down operation costs. The age restriction for eligibility for early retirement in the current personnel policies was thus recognised in the new scheme, payment of pension was therefore, not a general term of the new scheme.

Counsel for the respondent submitted that the Bank through its Governor amended the current Personnel Policies since the Bank and the Trustees could amend the Trust Deed. This submission does not reflect a correct interpretation of rules 4 of the Trust Deed. That rule is clear. It empowers only the Trustees to amend the Trust Deed, with the consent of the employer. Though the consent of the employer is a condition precedent to amending the Trust Deed. it does not in my view, confer on the employer the power to amend. The employer may withhold its consent where it does not agree with any proposed amendment of the Deed but has no power of its own to amend. A proper construction of Exh. P 1 A shows that it did not amend rule 6 of the Trust Deed. Similarly, a proper construction of rule 4 of the Trust Deed is that it does not empower the employer to amend the Trust Deed.

I therefore, do not agree with the trial judge that the appellant has power to amend the Trust Deed and that it amended rule 6 by paragraph 3 of Exh. P 1 A. Grounds 1 and 2 would therefore, succeed.

Grounds 3 and 9 complained against the trial judge's holding that appellant and the Trustees are one and the same thing to address the respondents' claim for pension dues

$\frac{c}{i} = \frac{c}{i} \frac{1}{i} - i$

Mr. Masembe Kanverezi contended that the pension dues are governed by the Retirement Scheme Trust Deeds which is managed by the Trustees. The Trust Deed requires an employee to attain the normal retirement age to be paid monthly Claims for pension can therefore, only be made to the Trust. In pension. exercising their functions, the Trustees are independent of the appellant's direction. He submitted that the respondents therefore, had no cause of action against the appellant for their claim for pension dues.

It was contended for the respondents that although the trustees appointed by the appellant have the general and exclusive management and administration of the scheme under rule 7 of the Trust Deed, these powers and rights were watered down by rule 15 which undermined the independence of the Trustees. To emphasis that argument, counsel for the respondents referred to $Exh$ . P 3 where the appellant's Director of Human Resources admitted that the Bank paid Mr. Sepuva his commuted pension and the other package in a lump sum. Learned Counsel submitted therefore, that the proper party to address the respondents' claim for pension dues is the appellant and not the Trustees.

In the alternative, counsel for the respondents argued that there is no privity of contract between the respondents and the Trustees since the contract of employment was between the respondents and the appellant. Payment of pension upon retirement of permanent staff of the Bank was one of the terms. They relied on Dunlop Pneumatic Tyre Co Ltd vs Selfriges & Co Ltd (1915) AC 847 at 853.

Rule 7 of the Trust Deed provides that:-

## "The Trustees shall have the general and exclusive management and administration of the Scheme."

In my view, the above confers on the Trustees exclusive powers in the management and administration of the pension funds. It is not true that the independence of the Trustees in exercising their powers under the Deed is watered down by rule 15. My understanding of that rule is that it reinforces the protection of the trustees in the exercise of their powers under the Deed by providing for the application of Law on Trustees in addition to the Deed. if they are not inconsistent with the Trust Deed

Rule 15 provides thus:-

"It is hereby declared that in addition to any powers or provisions for the indemnity or otherwise for the protection of the Trustees conferred by or contained in this Deed or Rules, the Trustees shall be entitled to exercise any powers conferred by law on Trust if and in so far as a contrary intention is not expressed in the Deed or Rules and to have the benefit of any indemnity or other protection given by law to the Trustees"

The rule protects the trustees against liability arising from the exercise of their powers under the Deed. There is nothing in the Deed or Rules which render the Trustees dependent on the appellant in the exercise of their powers under the Deed.

o Ido not- uith respect. also agree thal rhe apparent admrsston b1 the appellant's Drrector of Human Resources rn Erh P -l that the appellant pard Mr Sepuya-s penslon dues rn a lump sum has anr legal consequence The rrght to control and admrnister the Trust rs conferred b1 the Deeds It is therefore. a question of la\t and not of fact The proper part) to address clarms for pensron b1'the members are therefore- the Trustees but not the appellant

Grounds I and 9 uould thus succeed

The next rs ground -l The complarnt here rs agarnst the tnal ludge's reliance on Civil Appeal \o.3 of 1998 (supra) to decide a questron of fact as to \.\'hether the appellant's crrcular Erh P I A contarned a representatron that the respondents uould be pard pensron dues or are eligible under the pensron scheme

Mr Masembe-Kanverezr contended that the questron u hether pensron u as promised rn thc crrcular \ras not consrdered rn Masaba's case supra- and that rt could onlr be determrned br eramrnrng the crrcular rtself

For the respondents- it uas contended that the trral 1udge vras lustrfied to rell' on Masaba's case supra to determrne u hether Erh P I A contarned a \\ arrant\ as to pa)'ment ofpensron because that case ansu ered the same questron urth respect to housrng loan.

ln dealrng u rth thrs rssue. the tnal -ludge stated thus -

\*l hare been fo rced to quote the decision of the Supreme ('ourt's judgment as a bench-mark for the claim in the instant suit. This is

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because apart from the fact that the plaintiffs in this case claimed pension, the document used was the contentious circular which same circular was marked Exh. P 1 A in the instant case. These issues before this court revolve around the same argument, i.e.:-

whether the circular constituted a new contract.

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- whether the circular made unequivocal representation and - whether the defendant was estopped from making a defence deviating from the terms stipulated therein and therefore liable in damages.

In my earlier review of Civil Appeal No. 3 of 1998, I indicated that their lordships the justices of the Supreme Court answered the above questions in the affirmative."

It is worthy to note that the learned trial judge did not state, in the above passage whether the Supreme Court considered and found in that case that pension was offered to the respondents. This is because that question was not considered and therefore, not determined by Supreme Court in that case. It was thus, wrong, in my view, for the trial judge to rely on that decision to decide that question of fact when the earlier case was not on all fours with the case before her. It is not enough that the same circular was construed by the Supreme Court if it did not consider the relevant question. No proper deduction could be made from the determination of the fate of the housing loans in that case because the Supreme Court specifically considered that question and found that housing loans were exempted from deduction from the packages. Whether pension was offered to the respondents in the circular can only be determined by examining the document itself. I find merit in this complaint and the ground would succeed.

The next batch comprises grounds 5. 6 and 7. The criticism here is that the trial judge erred to hold that the circular contained a negligent misrepresentation that the respondents would be paid pension dues irrespective of whether they were eligible under the Trust Deed or not and thereby wrongly held the appellant liable for negligent misrepresentation when that claim was rejected in an interlocutory application as being time barred. Mr. Masembe Kanverezi submitted that a judgment on a claim that has been held to be time barred can not be supported.

Counsel for the respondents contended that the trial judge did not decide the case on the basis of negligent misrepresentation but rather on the basis of breach of contract which entitled the respondents to damages. In Counsel's view, any reference by the trial judge to misrepresentation was made obiter dictum arising from her extensive analysis of Civil Appeal No. 3/98 SCA.

The trial judge dealt with this matter in her judgment as follows:

"In the instant case, the defendant BOU misrepresented the plaintiff's rights upon which facts the plaintiffs prematurely retired thinking that **Rule 4 had been repealed.** It is irrelevant whether this misrepresentation was made intentionally or carelessly. The defendant BOU owed a duty of care to the plaintiffs. It therefore follows that the defendant BOU must take responsibility for indemnifying the plaintiffs who acted on their perils when they prematurely retired as shall be determined below."

The above passage clearly shows a finding of liability based on tort of misrepresentation, a claim which was rejected by Atwoki. J as being time barred.

$16$ In his ruling dated 11.1.2000 on an interlocutory application to amend the plaint. Atwoki, J rejected the inclusion in the Plaint of that claim for being time barred. He said

"From the above, I have come to inevitable conclusion that the amendment sought by the plaintiffs of misrepresentation would, in so far as it introduces a new cause of action in tort, be prejudicial to the defendant as it would deny him the defence of limitation under $s.2(1)$ of the Civil Procedure and Limitation (Miscellaneous Provisions) Act, thereby causing him injustice.

That takes this case out of the general rule to freely allow amendments if sought before hearing.

# I therefore do not allow the amendment in respect of misrepresentation."

It is trite that a Judge is barred from granting relief or remedy in a claim that is time barred by law. See Iga vs Makerere University (1972)EA 65. There is clearly a Ruling of the Court that the respondents' claim in tort for misrepresentation is time barred. It was therefore, wrong for the trial judge to make that claim the basis of her finding for the appellant's liability. Counsel for the respondents' contention that the trial judge's reference to misrepresentation was made obiter dictum is not supported by the above passage in her judgment. The finding based on that claim thus cannot stand. I therefore, find merit in these grounds and they would succeed.

Grounds 8, complained about the learned trial judge's holding that clauses 16 and 17 of the Trust Deeds were applicable to the instant suit and relying on them. Mr. Masembe Kanverezi contended that the two clauses do not apply to this case. He pointed out that clause 16 deals with a situation where there is a change of employers and the new one accepts to be bound by the terms of the exiting In his view, clause $17$ deals with a situation where the Retirement Scheme employer goes into liquidation or cannot contribute to the Retirement Scheme. He submitted that the two situations do not obtain in this case to attract application of those clauses.

On the other hand, counsel for the respondents while conceding that the two clauses do not apply to this case, contended that the trial judge's reference to the clauses was obiter and did not rely on them for her decision. Counsel relied on the judge's use of the words "would have applied" in reference to the clauses.

The learned trial judge in dealing with this issue stated that:

"I am of the considered opinion that rule 17 clearly secures the rights of members who prematurely retire in the event of reconstruction or any other case such as restructuring.

In all circumstances whether it is a breach of contract or liquidation and termination, the defendant BOU is liable to pay the plaintiffs pension or their annuity."

The above passage is a finding by the trial judge that rule 17 is applicable even to cases of termination like the instant one. I do not with respect, agree with that opinion because the conditions necessary to attract applicability of the rule do not exist in this case. There was no amalgamation nor liquidation of the employers. The argument that the reference to the rules $(16$ and $17)$ was made by the trial judge obiter dictum is not supported by the last paragraph of the above passage. I therefore, find merit in this ground. This ground would therefore succeed.

Finally, grounds 10 and 11 complained against the award by the trial judge to the respondents loss of the monthly pension as special damages. Mr. Kanverezi contended that this award was wrong because the monthly pension dues were neither pleaded as special damages nor strictly proved.

It is trite law that special damages must not only be pleaded but also strictly proved. See K. C. C. vs Nakaye (1972) EA 446 and 449. In the instant case, the record shows that the pension dues were neither pleaded as special damages nor have they been strictly proved. Counsel for the respondent argued that the trial judge was right to make the award because there were set formulae in the appellant Bank for calculating each employee's pension dues including for those who retired early. With respect. I find no merit in that argument. The mere fact that pension dues are determinable by the respective formulae in the appellant Bank is no justification for making the award in disregard to the laid down procedure for such a claim. The trial judge acted contrary to principle in making the award for special damages when such claim was neither pleaded nor proved as required by law.

There is therefore, merit in the complaint and the grounds would succeed.

There was also a cross appeal on two grounds namely -

- 1. that the learned trial judge erred in law and fact in assessing and awarding collective general damages of only shillings $150,000,000/$ = to the respondents and - 2. that the learned trial judge erred in law and fact when she failed to award interest from the date of retirement or breach of contract till institution of the suit and from the date of filing of the suit till the decree and payment in full.

The complaint in ground 1 above is about the quantum of general damages awarded. Counsel for the cross appellants contended that the amount awarded was so inadequate as to amount to an injustice and asked this court to intervene.

On the other hand. Mr. Masembe, counsel for the respondent to the cross appeal. contended that there was no award of shs. $150m$ = as general damages. The award was of a nominal damage of Shs. $150 =$ only.

Awarding general damages, the trial judge said:

# "A collective award of shillings $150/$ = is made as a token to disburse and to be shared equally by each member."

Clearly, there was no award of general damages of shillings 150 million. The award was of nominal damages to acknowledge that the legal rights of appellants to cross appeal have been infringed though the infringement did not entitle them to substantial damages. As the complaint is about something not awarded, it cannot stand.

This ground would therefore fail.

The second ground complained about the interest rate and the time when the interest warded should run from. Counsel for the appellants on the cross appeal contended that the trial judge should have exercised her discretion under section 26 (2) of the Civil Procedure Act to award interest at the Bank rate. They implore this court to intervene to award interest at court's rate from date of filing suit till judgment and on decretal amount from date of judgment till payment in full.

On the other hand, counsel for the respondent to the cross appeal contended that award of interest is at the discretion of the trial judge. The written submission has not shown that the trial judge erred in the exercise of her discretion. He relied on Mbogo vs Shak (1968) EA 93 at 96.

In awarding the interests, the trial judge said:

# "Interests at court rates awarded. To accrue from the date of judgment."

It is trite that an award of interest is at the discretion of the trial judge. In the instant case, the complaint is that the trial judge did not exercise her discretion under section 26 (2) of the Civil Procedure Act.

This being a claim essentially for payment of money, it entailed considering whether the appellants on the cross appeal were entitled to the pension dues before filing the suit. If they were, then they would be entitled to interest on that amount from the date of breach till filing the suit. This is because they were denied use of that money.

Then interest on the amount from the date of filing the suit until date of judgment and finally on the aggregate amount from the date of judgment till payment in full.

As shown above, the learned trial judge did not consider the above and made the interest order without any explanation. I think that was an error.

However, following my finding in the main appeal that the appellants on the cross appeal were not entitled to the pension dues under the new scheme unless they were eligible under the current scheme, award of interest does not arise. The error of the trial judge did not therefore, occasion the appellants on the cross appeal any injustice.

In the result, I would allow the main appeal and dismiss the cross appeal. The trial judge's order allowing the respondents' suit and all the consequential orders are set aside and in their place is substituted an order of dismissal of the suit. The respondents are to pay costs to the appellant here and in the High Court.

As Mpagi-Bahigeine, JA and Twinomujuni, JA both agree, the main appeal shall stand allowed and the cross appeal dismissed on those terms.

Dated at Kampala this $\frac{3}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ day of $\frac{1}{4}$ da 2001.

**IUSTICE OF APPEAL**

# THE REPUBLIC OF UGANDA

# IN THE COURT OFAPPEAL OF UGANDA

# **AT KAMPALA**

### CORAM: HON. JUSTICE G. M. OKELLO, JA. HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, J. A. HON. JUSTICE A. TWINOMUJUNI, J. A.

## CIVIL APPEAL NO.72 OF 2000

#### **BETWEEN**

#### **BANK OF UGANDA ::::::::::::::::::::::::::::::::::: APPELANT**

#### AND

| | NSEREKEO JOSEPH | | | |----------------|-----------------|------------------------|--------------------| | $\mathbf{2}$ . | KISUKYE SARAH | ) :::::::::::::::::::: | RESPONDENTS | | | HAJJI MUNGI | | |

(Appeal from the Judgement of the High Court of Uganda (Magezi, Ag. J) dated 12/9/2000 at Kampala in **Civil Suit No.961 of 1998)**

# **JUDGMENT OF A. E. N. MPAGI-BAHIGEINE, JA.**

I have read in draft the judgment of G. M. Okello, J. A. and I agree that the main appeal should succeed while the cross-appeal fails with costs.

$grd$ day of $\mathbb{R}$ combine 2001 Dated at Kampala this... A. E. N. Mpagi-Bahigeine **JUSTICE OF APPEAL**

### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

# CORAM: HON. MR. JUSTICE G. M. OKELLO, J. A. HON. LADY JUSTICE A. E. N. MPAGI-BAHIGEINE, J. A. HON. MR. JUSTICE A. TWINOMUJUNI, J. A

### CIVIL APPEAL NO.72 OF 2000

#### **BETWEEEN**

**BANK OF UGANDA...................................** 15

# AND

| 1. NSEREKO JOSEPH) | | |--------------------|---------------------------| | | 2. KISUKYE SARAH) | | 2 UATH MUNCH | |

20 3. HAJJI MUNGI)

> (Appeal from the Judgment of the High Court of Uganda (Magezi Ag. J) dated 12/9/2000 at Kampala in Civil Suit No.961 of 1998)

#### $25$

$\mathsf{S}$

$10$

### **JUDGMENT OF TWINOMUJUNI, J. A**

I have read in draft the Judgment of my Lord, Justice G. M. Okello, J. A. I

am in agreement with the reasoning and the conclusions reached. I have 30 nothing useful to add.

Dated at Kampala this....................................

*MIMILIO* . . . . . . . . . . . . . . . . 35 Amos Twinomajuni JUSTICE OF APPEAL.