Barclays Bank of Uganda Limited v Francis Mucunguzi (Civil Appeal No. 57 of 2010) [2013] UGHC 260 (1 February 2013)

Full Case Text

# **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA CIVIL DIVISION**

### **CIVIL APPEAL NO. 57 OF 2010**

*(Arising from Chief Magistrate Mengo Civil Suit No. 174 of 2009)*

## **BARCLAYS BANK OF UGANDA LIMITED APPELLANT VERSUS**

### **FRANCIS MUCUNGUZI RESPONDENT**

#### **BEFORE: HON JUSTICE ELDAD MWANGUSYA**

#### **JUDGMENT**

This is an appeal from the judgment and orders of Grade 1 Magistrate of Mengo, Her Worship Nakitende Juliet dated 17th Sept. 2010 wherein judgment was entered for the plaintiff. The trial Magistrate awarded the plaintiff special damages of shs 5,875,000, interest of 20% pa on special damages from the date of the cause of action till payment in full, general damages of shs 3,000,000, interest of 6% pa on general damages from date of judgment till payment in full and costs for the suit.

The background of this suit is that the plaintiff was employed by the defendant bank on 16th August 2007 as a sales representative which post was changed to Lead Generator. He was entitled to a net monthly retainer of shs 370,000 and a commission of 2.5 % on the amount of loan application initiated by the plaintiff on any loan

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value above shs 160,000,000. In January 2008, the plaintiff claims that in performance of his duties he approached and convinced M/s Sentoogo and partners to take a top up loan of shs 300,000,000 which they did and the amount drawn was shs 235 million, to which the plajntiff would be entitled to a commission of 2,5%. This in addition to a retainer amount of shs 1,450,000 was not paid by the defendant. It was on this basis that the plaintiff tendered his resignation from the bank citing frustration and failure by the bank to pay his commission on the said loan that the plaintiff/ respondent instituted an action in the trial Court for recovery of shs 7,325,000 as special damages, interest and costs for the suit.

The suit was heard inter-partes and judgment was entered for the plaintiff. The defendant being dissatisfied with the same instituted this appeal. The appellant was represented by M/s Kigozi, Ssempala, Mukasa, Obonyo Advocates while the respondent was represented by M/s Wameli & Co. Advocates.

This appeal is based on the following grounds;

- *1. The learned trial magistrate erred in law and fact when she failed to properly evaluate the evidence on the record and thus came to a wrong conclusion* - *manner that admission of 2. The learned trial Magistrate erred in law and fact when she entertained the tendering in and admitted some documentary pieces of evidence in a contravenes the procedural law on documents.*

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- *3. That the learned trial magistrate erred in law and fact when she held that the respondent was entitled to a commission on a top up loan facility taken out by M/s Sentoogo & Partners, an existing corporate customer of the appellant* - *4, The learned trial Magistrate erred in law and in fact in finding that the respondent was entitled to special and general damages with interest thereon.*

Counsel for the appellant argued the appeal in this order; ground 2, 3, 1 and 4. This order was adopted by the respondent. I will follow the same order.

On ground two it was counsel's submission that the learned trial magistrate allowed the respondent to tender in Court and rely on evidence a document in a manner that contravened the law. The piece of evidence that the trial Magistrate relied on to arrive at her decision had been objected to as being inadmissible as the plaintiff/ respondent was neither the author nor the recipient. He sought to rely on sections 66, 102 and 103 of the Evidence Act, Cap 6 on proof of signature and handwriting of a person alleged to have signed or written a document produced; the burden of proof and on whom the burden lies. He also relied on the decision in **Musisi Dirisa & 3 others v Sietco (U) Ltd 1993) iv KALR 67,** for the preposition that the evidential burden does not shift to the defendant unless there is cogent and credible evidence produced on the issue. He contended that the respondent herein did not demonstrate any proof of the impugned document. He thus invited this Court to allow this ground of appeal.

In response, counsel for the respondent did not agree that the trial Magistrate erred in admitting any of the pieces of evidence. He contended that even if she did, the admission of the same did not in any way adversely affect the outcome of the case. He further stated that Sections 66,101, 102 and 103 of the Evidence Act were not in any way flouted as alleged by the appellant as neither the handwriting nor the author of the letter from M/s Sentoogo was in issue. He went ahead to state that the authorities cited by the appellant upon this point are distinguishable from the case at hand. The respondent's oral evidence alone, that he approached M/s Sentoogo & Partners, which evidence was not challenged in cross examination, is sufficient to prove that fact even without the said letter.

I have looked at the provisions of the Evidence Act referred to in appellant's counsel's submissions but I do not see their relevance to this case. However, I agree that the document admitted as P. E IV was wrongly admitted. The document is a letter purportedly written by M/s Sentoogo and Partners addresses to Messrs O. N Osinde and Co Advocates confirming that Mr. Mucunguzi Francis had approached his firm concerning acquiring Bank facilities. The letter is undated. It was solicited by M/s O. N Osinde & Co. Advocates whose letter was tendered and admitted as P. E V. The contents of M/s O. N Osinde and Co. Advocates is reproduced hereunder:-

"The Managing Partner Sentoogo & Partners KAMPALA.

#### Re: MUCUNGUZI FRANCIS

The above subject matter refers.

The above gentleman is a former employee of Barclays Bank (U) Ltd.

We are informed by him that sometime in 2008, he approached you, and convinced you to apply for a loan of shs 300.000.000= (three hundred million only) from Barclays Bank (U) Ltd.

According to his contract he would be entitled to a commission from the bank as his remuneration.

Our humble request to formally confirm to us that he actually approached you over the same and indeed, acting on his conviction, you did apply for the loan and it was approved by the Bank. This will help us to render appropriate legal advice to our client"

The purported response from M/s Sentoogo and Partners was no committal. I will reproduce the letter because it is instructive on the point raised by counsel fo the respondent that even without the letter there was proof that he approached M/s Sentoogo & Partners.

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"Messrs, O. N Osinde & Co Advocates. Plot 30, Kampala Road, 4th Floor, Greenland Towers, P. O Box 27289 KAMPALA

Dear Sir,

#### RE: MUCUNGUZI FRANCIS

We acknowledge receipt of your letter Ref: GN 14/08 dated 14th January, 2009.

We wish to confirm that the above named approached us and some of our members ofstaff concerning acquiring Bank facilities.

For further details we refer you to Corporate Department, Barclays Bank."

First of all when the admissibility of the above document was challenged it was erroneous for the trial Magistrate to admit it without adducing the testimony of the person to whom it is addressed or copied. Secondly it is incumbent on the person who intends to rely on a document like in this case to ensure that it is

not properly laid before Court before any reliance can be place on it. It is not enough for a party to lay a document before Court and when the circumstances under which it was admitted are challenged he turns around and states that there was enough evidence without it. This begs to question as to what purpose it was produced in the first place. Thirdly there were three parties involved in the loan transaction. These are the respondent himself, the appellant bank and M/s Sentoogo & Partners who took the loan. The respondent claims that M/s Sentoogo & Partners were already their customers whose loan portfolio was being handled by the corporate Department of the Bank. It was necessary to call someone from M/s Sentoogo & Partners as an independent witness to explain the role of the respondent as far as negotiating the top up loan was concerned because as I have already stated even if we were to rely on the letter is dispute M/s Sentoogo & Partners were unequivocal as to whether or not they had been convinced by the respondent to take a top up of the loan they already had from the bank because as far as the Court is concerned if he needed a top up the Corporate Department administering the loan would adequately handle it without any involvement of the respondent. The respondent should have adduced evidence of the document properly and this Court finds merit in this ground of appeal which is also allowed.

On ground 3 of the appeal, counsel contended that it was the evidence of the appellant in the trial Court that he was not entitled to any commission from the top up loan of an already existing customer, and that the person who had a say on the commission was Balikudembe Joseph. That during cross examination (pages 24

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issue as to whether or not the respondent played any role that entitled him to a commission on the loan secured by M/s Sentoogo & Partners which was the substance of the trial. I do not find it necessary to delve in the rest of the grounds of appeal.

This appeal is allowed with costs to the appellant in this Court and the Court below.

*wlS*

**JUDGE 01.02.2013**

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