Bazira and Another v McLeod Russell (HC CV CS NO. 0049 OF 2004) [2012] UGHC 432 (3 February 2012)

Full Case Text

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT FORT PORTAL

**HC CV CS NO. 0049 OF 2004**

**BAZIRA GEOFFREY**

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**WABWIRE LEUBEN PLAINTIFFS**

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### **VERSUS**

**MCLEOD RUSSELL DEFENDANT**

# **BEFORE HON. MR. JUSTICE MIKE J. CHIBITA**

## **JUDGMENT**

This suit was consolidated after the two separate suits by each of the plaintiffs were found to be founded on similar grounds against the same defendant.

The plaintiffs were employees of the defendant company at different times until April 2004 when their services were terminated by • summary dismissal for alleged breach of their contracts and misappropriation of funds.

The 1st plaintiff had risen to the rank of Senior Field Manager while the 2nd plaintiff was Finance Manager at the time of his dismissal.

The facts leading to the dismissal revolve around Shs 17,000,000 million that the Government of Uganda injected into the company's Kiko Health Centre for purposes of extending health services to the community around Kiko Tea Estate.

Two issues were framed by the parties for consideration at the trial:-

1 Whether the dismissal of the plaintiffs was lawful.

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2. What remedies (if any) are available to the plaintiffs •

The pt plaintiff was represented by learned Counsel Martin Musamali of M/s Musamali and Co. Advocates. The 2nd plaintiff was represented by learned Counsel Ronald Semugera of M/s Ruhindi and Co. Advocates. The defendant Company was represented by its in house learned Counsel Milton Ochieng.

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. The lawyers requested to file written submissions, which request bburt granted, and issued a timetable for filing the submissions which the parties complied with.

On issue one it makes sense to start with the defendant's submissions. The defendant averred that the plaintiffs entered into an agreement with the Government of Uganda in which they committed the defendant company without proper authorization from the company. As a result of this transaction Shs 17,000,000/= was not properly accounted for.

The plaintiffs both deny ever causing the loss of Shs 17,000,000/ = to either the company or the Government of Uganda. As part of their evidence .they refer to the evidence of PW3 Dr. Joa Oketcbo Ojony, the District Health Officer who testified that the plaintiffs run the project to the satisfaction of government and that no money was misappropriated during the period under review.

Whether or not the plaintiffs run the project according to regulations or whether or not money was misappropriated Eire not issues in this case. The only issue is whether the dismissal of the plaintiffs was lawful.

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These are two separate issues because it is possible for the 1 ' tiffs to be found responsible for the misappropriation and yet ? j-o^icqed unlawfully. It is also possible for the plaintiffs to have 1 wfully dismissed not withstanding their lack of culpability in the misappropriation of Shs 17,000,000/=. It is also possible for the

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dismissal to have been lawful and the plaintiffs to have misappropriated the money in question.

The point of all this is to state clearly that court will not engage so much into finding whether the plaintiffs misappropriated Shs 17,000,000/ $\pm$ or not. According to the issues at hand, court will restrict itself to finding whether the defendant company followed due process in dismissing the plaintiffs.

It is the case for the defendant company that during a routine audit, it was discovered that the plaintiffs had violated the terms and conditions of their employment as contained in the Terms and Conditions of Employment, whose schedule of Offences and likely Disciplinary Action; section (e) thereof states as follows:-

"...willfully damages, misuses, misappropriates buildings, machinery, other property or tools used in connection with his/her work. The disciplinary action is summary dismissal."

Following the unearthing of probable incidents of violation of the terms of employment, Counsel for the defendant avers, the plaintiffs were summoned to the disciplinary team comprised of the highest authorities.

Counsel further argued that there is no first and hard rule as to what amounts to a fair hearing, it is a question of fact depending on the circumstances of a given set of occurrence of events. Further that a fair hearing does not necessarily mean a 'water tight hearing' or necessarily an 'excellent hearing'.

He, in effect, contends that in the instant case the plaintiffs were properly summoned, given a hearing before a highly placed panel before they were dismissed. He points to the minutes of inquiry, nature of proceedings, nature of questions asked and the opportunity accorded to the plaintiffs to answer the allegations leveled against them as evidence of fairness at its best.

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Counsel downplayed the effect of not having the audit report tendered into court as an exhibit by stating that the dismissal was not solely based on the audit report.

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That report only acted as an alarm or whistle blower that exposed other fraudulent dealings. Neither did failure to summon its author as a witness jeopardize the defendant's case, he added.

Counsel for the 2nd plaintiff, for his part, argued that to determine whether the-dismissal was lawful court has to determine two aspects; one being the ground for dismissal and the other being the . manner/procedure for dismissal.

He added that the suspension and dismissal letters served on Iris .client stated the reason for dismissal as the missing company funds amounting to Shs 17,000,000/=. However this money, according to Counsel, was from the Government and the District Health Officer, PW3, testified that the funds were properly accounted for.

He further disputed the fact that this was company money or that there was a proper audit report detailing the instances of misappropriation hence absence of a credible basis upon which a dismissal could have been grounded.

He therefore averred that the hearing that his client was subjected to violated the provisions of article 42\_aLthe\_Constitution of the RepuhliC-df Uganda. The article of the Constitution provides for a • fair hearing. *'*

Particulars of failure to grant a fair hearing as enumerated by . counsel include:

that the allegations were never brought to his attention either orally or in writing prior to the hearing thereby denying him an opportunity to prepare a defence,

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that the audit report which is alleged to have contained the allegations was never shown to him and he was not given ample time to prepare his defence.

- that at the hearing he was not informed of his rights and was suspended immediately and thereafter dismissed without bein£ given.,a chance to defend himself against the findings of further investigations.

On the basis of these lapses, counsel contended that the procedure for dismissal fell short of the stipulated procedure.

Counsel for the 1st plaintiff presented the same arguments about lack of a fair hearing and therefore the dismissal being unlawful. He cited the book Administrative Law by William Wade and the case of **Kamurasi Charles versus Accord Properties Ltd SCCA No. 3 of 1996** to support his assertion that the right to a fair hearing is cardinal.

He disputed the authenticity of the audit report, pointed out that the 1st plaintiff was never given an opportunity to answer the queries contained therein or to cross examine the authors. Counsel referred court to the case of **Barnwell versus Attorney General of Guyana (1994) 3 LRC 30** to support his contentions.

Citing the case of **Francis Muntu versus Kyambogo University** Counsel wanted court to find that the disciplinary committee of the defendant acted irrationally by dismissing the plaintiff and therefore the dismissal was a nullity in law.

Counsel referred court to the case of **Re (H) K (An Infant) (1967) 1 All ER 226.** the judgment, of Lord Parker where it was held that an dministrative body must act fairly and observe the rules of natural justice.

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Additionally he faulted the company for having no laid down procedure to follow in disciplinary cases. Citing the case of De Souza versus Tanga Town Council (1961) EA 387 Counsel pointed out that where there is no laid down procedure a form of inquiry must be made such as will enable the Tribunal to fairly determine the question at issue.

In summary, Counsel for the 1st plaintiff contended that his client was not properly summoned before the Tribunal to answer charges that were not properly brought to his attention and was not accorded the right to properly prepare his defence and was therefore subjected to an unfair trial that violated the principles of natural justice.

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The defendant company indeed had Terms and Conditions of Employment that contain different offences and the consequences of breach. The document however does not contain a procedure for conducting a hearing before reaching a decision on the guilt or otherwise of an accused employee.

Therefore the principles of natural justice are expected to fill the void left by the Terms and Conditions of Employment of the defendant company.

The first point that the plaintiffs pointed to as having constituted violation of the tenets of a fair hearing is the way they were summoned. There were no summons in writing inviting the plaintiffs to attend the Tribunal.

PW1 and PW2 both stated that they were summoned by telephone. This was confirmed by DW2 who stated that the plaintiffs were called on phone by the Personnel Manager.

There is no statement to contradict this evidence. For a matter that would end in the summary dismissal of the plaintiffs it was important to have written summons dispatched to them and having $\ast$

them sign to acknowledge receipt. To call them on telephone for such a serious matter was casual and denied them of their right to know in advance the charges to be leveled against them.

This brings us to the second instance of violation of the principles of a fair hearing that were raised. This was that the charges leveled against the plaintiffs were never brought to their attention prior to the trial

Part of the usefulness of the summons is that they contain the nature of charges that an accused person will be required to answer.

The basis of the charges against the plaintiffs was stated to be an audit report. The audit report was never tendered in by the defendants, its author was not called as a witness and the copy tendered in by the plaintiffs was not properly signed.

DW1 and DW2 informed court that the audit report did not contain the full complement of charges against the plaintiffs. Rather, they stated, it acted as an alarm or whistle blower. What then were the actual charges? What was their origin?

The basis of the charges against the plaintiffs therefore is non existent. The plaintiffs therefore could not have been accorded sufficient opportunity to defend themselves when they did not know the charges against them.

Neither were they given a chance to get legal representation. It is trite that legal representation is an important component of a fair hearing.

The outcome of the Tribunal that eventually dismissed the plaintiffs is not definitively set out on record. DW1 tendered in a document entitled: Fair and Accurate Record of the Proceedings of Enquiry.

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Thereafter there were unsuccessful attempts to tender in a draft uopy of the Minutes of the meeting of the Tribunal.

For such an important Tribunal deciding on the future of two senior ' employees of the'company I find that the record was too casually kept. It cannot stand legal scrutiny to qualify as a serious record of ' proceedings. It was disputed by the plaintiffs and I understand their 'discomfort with it.

The plaintiffs.were suspended pending further investigations but were never called back to be informed of the outcome of these investigations. Instead they were summarily dismissed thereafter.

Failure to properly summon the plaintiffs, denying them, a chance . to know the charges leveled against them, refusing or neglecting to accord them a right to legal representation and failure to keep a proper record of the proceedings that resulted in the dismissal of the plaintiffs all resulted in violation of the tenets of a fair hearing and therefore contravened the principles of natural justice.

I therefore find that the dismissal of the plaintiffs was unlawful for having been arrived at by a Tribunal that failed to observe the: principles of a fair trial.

The next and last issue concerns the remedies available to the plaintiffs for the unlawful dismissal.

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The 2nd plaintiff claims general damages of Shs 138,920,000/= beinp' his total earnings from the unexpired contract that would have run till 2025.

Counsel cited the cases of **Uganda Wildlife Authority versus Francis Mukama CA No. 78** of **2004** and **Southern Highlands Tobacco versus Marqueen (1960) EA 490** to support his claim for payment of salary for his unexpired term.

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The 2nd plaintiff for his part claims general damages of Shs 256,000,000/-- being the contract sum up to the unexpired period, gratuity and leave allowance.

He also claims special damages of Shs 100,000,000/= for defamation. He cites the cases of **Scott versus Simpson (1882) QBD 2003, Ratchiff versus Evans (1892) 2QB 524** and **Biwott versus Cay Ltd HCCS 1067/99 Kenya to support his claim.**

Counsel for-t-he defendant submitted that the damages claimed are excessive. He cites **Stroms versus Hutchinson (1950) AC 515** to stress the point that special damages are exceptional and must lie claimed specifically and proved strictly.

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He also cited the case of **Bank of Uganda versus Betty Tinkamanyire SCCA No. 12 of 2007** to advance the argument that a wrongfully dismissed employee cannot recover wages and benefits for any period beyond the requisite notice period.

He submitted that the Is' plaintiff is entitled to only Shs 7,600,000/ = while the 2nd defendant is entitled to only Shs 1,623,000/= as special damages.

I agree that it is trite law that special damages must be proved specifically. The plaintiffs did not dispute the authority of **Bank of Uganda versus Tinkamanyire** and therefore the 1st plaintiff is awarded Shs 7,600,000/ = and the 2nd plaintiff is awarded Shs 1,623,000/= as special damages.

The above sums will attract interest at the rate of 29% per annum from date ofjudgment till payment in full.

Based on the pleadings and claims the plaintiffs are also awarded hs 50 000 000/= each, as general damages for unlawful dismissal, with interest at court rate from the date ofjudgment.

tUa nlamtiffs are also awarded costs of the suit.

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Dated at Fort Portal this 3rd day of February, 2012

lee Clinkit **JUSTICE MIKE J. CHIBITA** Judgment read in the presence of:-1. Counsel for Plaintiffs: Alscent 2. Counsel for Defendant: Nilf-un Ocline. 3. Plaintiff: Walwire Lenkin 4. Defendant: Alexand Quesmus Matziko / HRM 5. Court Clerk/Interpreter: Herlet Nive Gigest $302/2012$ Bilit Velle ( Date Mike J. Chibita

**JUDGE**

# THE REPUBLIC OF UGANDA

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#### IN THE HIGH COURT OF UGANDA HOLDEN AT FORT PORTAL

## HC CVCS NO. 0049 OF 2004

PLAINTIFFS 3AZIRA GEOFFREY A/ABWIRE LEUBEN

# VERSUS

ry. LEOD RUSSELL... DEFENDANT

# DECREE

THIS suit coming up for final disposal on the 3rd day of February 2012 before his Lordship Hon. Mr. Justice Mike J. Chibita in the absence of Counsel for the Plaintiffs (Wabwire Leuben the 2nd Plaintiff in attendance) and in the presence of Mr. Milton Ochieng Counsel for the Defendant who was also represented by Onesmus Matsiko the Human Resource Manager.

IT IS HEREBY ORDERED and DECREED as follows:-

- **1)** The dismissal cf the Plaintiffs was unlawful for having been arrived at by a Tribunal that failed to observe the principles of a fair trial. - 2) The 1st Plaintiff is awarded Ushs. 7,600,000/= (Ushs. Seven Million Six Hundred Thousand Only) and the 2nd Plaintiff is awarded Ushs. 1,623,000/= (One Million Six Hundred Twenty Three Thousand Only) in special damages. - 3) The award of special damages in (2) herein above attracts interest of 29% p.a. from the date of judgment till payment in full. - 4) The Plaintiffs are also awarded Ushs. 50,000,000/= (Ushs. Fifty Million Only) each, as general damages for the unlawful dismissal. - 5) also awarded interest in (4) herein above at Court rate from the date of judgment till The Plaintiffs are payment in full.

DEPUTY REGISTRY

**6)** The Plaintiffs are also awarded costs of the suit

day of ,2012. DATED at Kampala the

Extracted by: M/s Katende, **Ssempebwa** & go, Advocates, Solicitors and Legal Co P. O. Box 2344, KAMPALA.

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