Equity Bank (U) Limited v Hameyimana (Civil Appeal No. 10 of 2016) [2023] UGCA 53 (20 February 2023)

Full Case Text

### THE REPUBLIC OF UGANDA

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

(CORAM: Buteera, DCI; Bamugemereire & Musota, JJA)

### CIVIL APPEAL NO. 10 OF 2016

EQUITY BANK (U) LTD ..... APPELLANT

#### VERSUS

HAMEYIMANA RICHARD RESPONDENT

### IUDGMENT OF BUTEERA. DC. I

# 10 Introduction

This is an Appeal arising from the decision of Henry Peter Adonyo, J, in High Court Civil Suir No. 714 of 2013 (Commercial Division). Judgment is dated 14'h July 2015.

### Brief facts

15 20 The plaintiff (now respondent) filed High Court Civil Suit No. 714 of 2013 contesting the sale of a motor vehicle truck by the defendant (now appellant) pursuant to a Micro Leasing facility agreement executed between the two parties. The respondent sought compensation for the value of the motor vehicle plus damages and costs of the suit. The appellant denied the allegations set forth by the respondent and counterclaimed for UGX 18, 628, 857/= being the sum outstanding on the loan facility, plus general damages, interest and costs of the suit. The appellant being dissatisfied with the judgment of the trial court that was made in the respondent's favor, filed this Appeal.

### Grounds of Appeal

l. The learned trial Judge erred in fact when he found that the plaintiff had not defaulted on his rental payments under the micro leasing facility.

2. The learned trial Judge erred in fact and in law when he found that the impounding and sale of the suit vehicle by the defendant was unlawful.

3. The learned trial Judge erred in law when he awarded the plaintiff a sum of UGX. 62, 21 1, 000/= as loss of business when it was not pleaded and proved.

4. The learned trial Judge erred in law when he awarded the plaintiff the value of the suit vehicle in the sum of UGX. 37, 500, OOO/= when the plaintiff did not own the same and had not paid the said value.

5. The learned trial Judge erred in law when he awarded the plaintiff the sum of UGX. 21,545,000/= and 7, 500, 000/= when they were sought by the plaintiff as an alternative to the value of the suit vehicle.

6. The learned trial Judge erred in law when he awarded the plaintiff special damages in the sum of UGX. 8,770,000=/,4,200, O0O/=, 1, 125,000/=, 600, OOO/= when not proved 10, 800, 000/= as the value of the Irish potatoes when not pleaded and proved.

7. The learned trial Judge erred in law and fact when he failed to properly evaluate the evidence and thereby entirely dismissing the appellant's counter- claim. 20

### Representation

25 At the hearing of the Appeal, the appellant was represented by Mr. Lou Jarvis while Mr. Matovu Muwanga together with Ms. Gloria Mujyawimana and Mr. Fredrick Ssemwanga represented the respondent. Both parties filed conferencing notes which they applied to Court to adopt as their written submissions. Court allowed the application and adopted the submissions. It will base on these to determine this Appeal.

### Issues

At scheduling, counsel adopted the grounds of Appeal as the issues

### Ground 1

### Case for the Appellant

- 5 Counsel for the appellant submitted that the relationship between the appellant and the respondent was a contractual one and it was regulated by the offer letter and the master lease executed by the two parties. He argued that from Clause (C) 1 of the Lease offer, it was clear that the respondent was obliged to pay a sum of UGX 2, 474, L06/= as the monthly rental instalment - yet as per his own admission in paragraph 34 of his Witness Statement, only the instalments for the months of May and June 2008 were paid in full. And that the respondent further admitted that he did not pay the agreed installment for the month of August and for several other months. 10 - It was counsel's contention that this evidence was disregarded by the trial Judge who came to an erroneous finding that the respondent had not defaulted on his rental payments as set out in the offer letter. 15

### Case for the Respondent

20 Counsel submitted that the relationship between the two parties was contractual and it was governed by the Lease Offer. That the said offer provided that the rental payments were to be effected within a period of twenty-four (24) months and it was the respondent's testimony that he deposited the amount due on the appellant's account, albeit in small amounts but he would ensure the monthly total sum of UGX 2.4M was completed.

It was the respondent's testimony that for the month of August, he had deposited UGX 700, 000/= which was not the full amount. Counsel contended that the motor vehicle was impounded on 30/08 /2009 yet the month of August has 31 days and at the time of impounding, the twenty-four months 25

stipulated in the Lease offer had not lapsed. That this was confirmed by the appellant in his testimony.

Counsel contended that the trial Judge rightly found that the respondent had not defaulted on his monthly rental payments. His reasoning was that at the

5 time of impounding the vehicle, the appellant had deposited a total sum of UGX 21, 545, OOO/= on top of having paid the initial deposit of 2O%. It was thus counsel's submission that the learned trial Judge was alive to the facts and testimony of the parties and reached a right conclusion.

### Ground 2

# 10 Case for the Appellant

Counsel submitted relying on the respondent's testimony in crossexamination that the motor vehicle was registered in the appellant's name and that this was proved by Exhibit D9, the vehicle log book. He argued that being the registered owner of the vehicle, coupled with the respondent's breach on the payment of his monthly rental instalments gave the appellant

15 the absolute right to sell the vehicle, as it indeed did.

He sought to rely on Fred Kamanda v Uganda Commercial Bank; SCCA No. 17 of 1995, for the proposition that 'unless the contrary is shown, the name in the Registration Book is proof of ownership of the vehicle to which it relates.'

Counsel contended that the learned trial Judge failed to consider this evidence plus the submissions of the appellant thereby arriving at an erroneous decision that the sale was unlawful.

### Case for the Respondent

25 Counsel submitted that the learned trial Judge found that the respondent had acquired an equitable right in the motor vehicle which he could only lose where appropriate notice on his part was issued by the appellant.

Counsel pointed out that it was not in dispute that the impounding and selling of the motor vehicle by court bailiff/ auctioneer was without a court order. He contended that the Lease offer was the only agreement that was signed between the parties and it had no provision for impounding the motor

5 vehicle.

Counsel referred to the appellant's witness who testified that there was nothing in the agreement providing for impounding the vehicle. He argued that the claim by the appellant that it was the registered owner with a right to impound and sell was therefore misconceived. Counsel added that once it was established that the respondent acquired a right to the vehicle, the appellant could not exercise its absolute right to sell without recourse to following proper procedures. This was premised on the principle of legitimate expectations that was upheld by this Court in Bank of Uganda v Joseph Kibuuka & 4 others; Civil Appeal No. 281 of 2016.

Counsel submitted that the principle extends to a benefit that an individual has received and can Iegitimately expect to continue or a benefit he expects to receive. He contended that the Lease offer provided that at the end of the contract, the respondent would have a right to purchase the same upon payment of 2% of the value. And that the respondent religiously deposited money on the appellant's account for fourteen (14) months with expectation to own the vehicle at the end of the lease and this expectation was cut short by the appellant's unlawful actions of impounding and selling the motor vehicle. 15 20

He thus prayed that the Court find that the learned trial Judge did not err in making that finding. 25

### Ground 3

### Case for the Appellant

Counsel submitted that the learned trial Judge erroneously awarded the appellant a sum of UGX 62,211,000/= as lost future earnings when the said sum was neither pleaded nor proved. He pointed out that the Plaint that set forth the respondent's claim makes no mention of the UGX 62,211, 000/=. He argued that the respondent only prayed for a return of the suit vehicle, or payment of its value in the alternative plus costs of the suit.

He argued that the plaintiff having not proved at any point in the proceedings that he had lost the said amount of money, the said sum awarded by the trial Judge could only be treated as a speculative award of special damages that had neither been pleaded nor proved. Counsel cited Musoke v Departed Asian Property Custodian Board & Anor U990- 19941 1 EA 279, where it was held that: 10

#### 15

### "...special damages encompass expense and lost earnings."

He thus submitted that it is a settled principle of law that special damages must be specifically pleaded and strictly proved as was decided in Stanbic Bank Ltd v Kiyimba Mutale; SCCA No. 2 of 2010.

Counsel thus contended that the above holding was very applicable in the instant case where the trial Judge awarded a sum of UGX 62, 2ll, 000/=, which sum could be categorized as special damages, yet the same was neither pleaded nor proved. It was counsel's view that this award had no basis in law and was thus an error of law that occasioned a miscarriage of justice to the appellant. 20

#### Case for the Respondent 25

Counsel submitted that Exhibit Dl0, the Leasing Application Form contained a provision for net profit of UGX 62 , zll, 000/=. He contended that the respondent, in his claim, prayed for court to grant him any other reliefs which is a default clause that provides for other remedies.

Counsel submitted that it was not in dispute that the motor vehicle was the respondent's only source of income and by illegally and unlawfully impounding the same, the appellant deprived the respondent of his livelihood. He invited Court to see Section 33 together with Section 98 of the Civil Procedure Act that enjoin the High Court with inherent powers to grant remedies for the ends of justice to be met.

Counsel argued that the learned trial Judge did not import the sum of UGX 62,211, 000/= into the matter as claimed by the appellant since it was stated to be the net profit in the application form signed by the parties, and it was from this form that the Lease offer was extracted. It was counsel's contention that the appellant's failure to cross- examine the respondent on the contents of Exhibit 10 should not be blamed on the trial Judge or the respondent. He 10

cited the Supreme Court decision of llganda Revenue Authority v Stephen Mabosi; SCCA No. 26/ 7995, where Karokora, JSC, citing with approval the decision of James Sabwiri & Fred Musisi v ttganda (unreported) SC Criminal Appeal No. 5/ 1990, held that: 15

> "An omission or neglect to challenge the evidence-in-chief on a material or essential point by cross-examination would lead to the inference that the evidence is accepted subject to its being assailed as inherently incredible or probably untrue."

He submitted that although this dealt with a criminal matter, the principle applies to civil matters as well.

# zs Ground 4

### Case for the Appellant

Counsel reiterated his arguments under ground 2 to support the proposition that the respondent did not own the vehicle and it was thus erroneous for the trial Judge to order that the respondent was entitled to be paid the full value of the vehicle he didn't own.

He referred to Clause C (4) of the Lease offer that only gave the respondent an option to purchase the vehicle at the end of the lease period by paying2% of the original cost, and only if all the terms of the Lease had been satisfied.

Counsel argued that from the evidence adduced before the trial court, it was evident that the respondent had not yet met the requirements that would entitle him to purchase the vehicle. He referred to the respondent's own testimony in cross- examination that he did not pay the UGX 37, 500, 0OO/= in full and his admission that whereas he was supposed to pay a monthly

instalment of UGx 2 , 474, OOO/=, he only paid for the months of May and June 2008 and did not pay the agreed instalment for most of the months.

It was thus counsel's contention that it was erroneous for the trial Judge to award the respondent a refund of the sum of UGX 37, 500, 000/= as the value of the vehicle, yet he was neither the owner of the vehicle nor had he paid the said amount in order to entitle him to the claim. In counsel's view, this only resulted into the unjust enrichment of the respondent and a miscarriage of justice against the appellant. 15

### Case for the Respondent

- Counsel reiterated his submissions on issue 2 to support the proposition that the respondent obtained equitable rights in the motor vehicle and the learned trial Judge rightly found so. He argued that the appellant's action of impounding and selling the motor vehicle before the expiry of the lease period stripped the respondent of the right to fully purchase it. 20 - Counsel submitted that it was not in dispute that at the time of the hearing, the motor vehicle had been sold and the remedy available in the circumstances, was to grant the value of the motor vehicle. It was counsel's view that the learned trial Judge rightly granted. 25

### Ground 5

### Case for the Appellant

Counsel submitted that the Plaint did not contain a prayer for the sums of UGX 21, 545, OO0/= and 7,500, 000/= but rather the respondent's prayers were only for a return of the motor vehicle plus general damages and costs of the suit. He argued that the respondent only introduced the said sums in his witness statement. He contended that, even then, the said sums were only asked for in further alternative to the prayer that the suit vehicle be returned or its value paid. In counsel's view, that award was not founded in law and ought to be set aside.

### Case for the Respondent

Counsel submitted that the learned trial Judge properly evaluated the evidence and established that the respondent had paid UGX 7, 500, 000/= being 20% towards securing the lease facility and UGX 2I, 545, O0O/= towards

loan repayment well before the expiry of the lease period which was still running for more 8 months. 15

Counsel contended that the learned trial Judge properly confirmed that since the respondent's vehicle was unlawfully impounded and sold after he had deposited the afore mentioned amount which money was had and received by the appellant when the period to repay the lease facility was still subsisting, the respondent was therefore entitled to recover the same from the appellant. He argued that the amount mentioned here was never merely prayed for as an alternative remedy but a finding by the trial Judge that the appellant ought to have returned all the money had and received from the

respondent. 25 #### Ground 6

## Case for the Appellant

Counsel reiterated his arguments under issue 3 that it is trite in law that special damages must be specifically pleaded and proved. He argued that the trial Judge awarded special damages when no evidence had been adduced to prove that the special damages that were so awarded had been suffered as a result of the car being impounded and sold. And further that the amount

Counsel referred to the case of Bonharm Carter v Hyde Park Hotels Ltd (1945) 64 TLR 777, which was cited with approval in Tumusiime & 318 others v Bushenyi District Local Government & Anor (HCCS No. OO32 of 2012) where it was held that: 10

awarded as the value of Irish potatoes was neither pleaded nor proved.

"On the question of damages...the plaintiff must understand that if they bring an action for damages, it is for them to prove their damages, it is not enough to write down the particulars and so to speak, throw them at the head of the court saying; this is what I lost; I ask you to give me these damages. They have to prove it..."

It was counsel's contention that it was erroneous for the trial Judge to award special damages when they had not been proved by the respondent. 20

## Case for the Respondent

Counsel submitted that the learned trial Judge found that the respondent had proved special damages. That the respondent testified that he incurred comprehensive insurance, arrangement fees, inspection fees, repairs with receipts attached and the value of Irish potatoes that were found on the motor vehicle at the time when it was impounded. And that this evidence was neither denied nor rebutted by the appellant.

Counsel contended that the appellant's claim that the respondent did not prove special damages was false. He referred to Lease Offer, Exhibit D10, which provided for comprehensive insurance which the respondent paid in the sum of UGX 4, 200,000/= inspection fees in the sum of UGX 600 , 000/=, arrangement fees of 3% in the sum of UGX 1,l25,0OO/= and that all these were part and parcel of the Offer implying that the appellant could not have released the motor vehicle if these fees were not paid. In his view, the fact that the respondent was given the vehicle was sufficient proof that he had

paid those fees.

Counsel further submitted that the respondent was charged with the responsibility of maintaining the motor vehicle and he attached receipts showing different repairs made during the period when he was using the motor vehicle and these amounted to UGX 8, 770, O0O/=, which evidence was neither refuted nor rebutted. 10

#### Ground 7 15

# Case for the Appellant

Counsel submitted that it was the appellant's evidence at trial that the respondent had defaulted on payment of his monthly instalments. That this was well admitted by the respondent when he stated in cross examination that whereas he was supposed to pay a monthly instalment of UGX 2, 474, 06/=, he did not pay the agreed instalment for most of the months and was therefore in default.

Counsel further submitted that the appellant adduced evidence to show that when the respondent defaulted on the Lease Agreement, the appellant exercised its right to sell the vehicle in order to recover the sums that had been advanced for the purchase of the said vehicle. That DWl testified that after the sale of the motor vehicle, a balance of UGX 18, 628, 857/= remained outstanding. 25

Counsel thus argued that if the trial Judge had properly evaluated the evidence before him, he would have come to a different conclusion and found that the appellant was entitled to the amount prayed for in the counterclaim.

5 He thus invited this Court to exercise its duty as the first appellate court and reappraise the evidence and subject it to a fresh scrutiny as enunciated in the case of Pandyav R (1957) EA 336.

## Case for the Respondent

10 15 Counsel submitted that the trial Judge properly evaluated the evidence and arrived at the correct conclusion. That the trial Judge properly found that the appellant impounded and sold the motor vehicle leading to loss of income. And that the trial Judge found that the appellant could not account for the proceeds from the sale of the motor vehicle and rightly rejected the appellant's counter claim. He argued that the claim was not substantiated and the bank statements adduced by the appellant's witness were not certified hence the Judge's conclusion that they were a forgery.

He further submitted that DWl testified that there was an outstanding balance of UGX 18,628, 857/= but could not explain how the appellant came to that claim.

20 Counsel also pointed out that from Exhibit 1, there was an additional security of land comprised in Buddu Block 100 Plot 116 and it was not sold by the Bank as confirmed by DWl and that the only explanation was because the Bank had been fulty settled upon selling of the vehicle and the respondent was not owing any more money as the trial Judge rightly found.

25 He thus prayed that the Appeal be dismissed and all the findings of the trial Judge be upheld with costs to the respondent both here and at the lower court.

#### Court's consideration

# Duty of first appellate court

Rule 30 (1) (a) of the Judicature (Court of Appeal Rules) Directions S.l. 13-10 provides:

(1) On any appeal from a decision of the High Court acting in the exercise of its original jurisdiction, the court may-

(a) reappraise the evidence and draw inferences of fact; and

G) in its discretion, for sufficient reason, take additional evidence or direct that additional evidence be taken by the trial court or bY a commissioner.

Rule 32 (1) of the same Rules provides for general powers of the Court as:

"(1) On any appeal, the court rily, so far as its jurisdiction permits, confirm, reverse or vary the decision of the High Court, or remit the proceedings to the High Court with such directions as may be appropriate, or order a new trial, and make any necessary, incidental or consequential orders, including orders as to costs."

The duty of the first appellate court was equally laid out by the Supreme Court in the case of Fr. Narsensto Begumisa & 3 others v Eric Kibebaga; SCCA No. I7 of 2OOZ [2OO4] KALR 236 at 247, rhus'.

> "The legal obligation on a first appellate court to re-appraise evidence is founded in the common law, rather than in the rules of procedure. It is a well settled principle that on a first appeal, the parties are entitled to obtain from the appeal court its own decision on issues of fact as well as of law. Although in a case of conflicting evidence the appeal court has to make due allowance for the fact that it has neither seen nor heard

# the witnesses, it must weigh the conflicting evidence and draw its own inference and conclusions." (Sic)

Conscious of this duty, I will proceed to resolve the grounds that were adopted as issues in the order in which both counsel made their submissions.

s Ground 1

# The learned trial Judge erred in fact when he found that the plaintiff had not defaulted on his rental payments under the micro leasing facility.

In finding that the respondent had not defaulted on his rental payments, the trial court reasoned that the entire lease sum was supposed to be paid back

in24 months and the respondent had, by the time of impounding his vehicle, paid for 16 months. Secondly, his reasoning was that the Lease offer did not provide for the impounding of the vehicle and in so doing, the appellant breached the contract between itself and the respondent. 10

15 The basis of the relationship between the appellant and the respondent was a Lease Offer executed by the two. Both parties agree on this in their submissions. It was admitted in evidence and marked 'Exh DL'. A look at the Offer Letter dated 13'h May 2008, shows under Part C on repayments as follows:

# l. Rental: You will be required to make 24 monthly payments of UGX 2, 474, 106/: tnclusive of VAT.

- 2. - 3. - 4. Option to purchase: At the end of the lease period, if all the terms have been satisfied, you will be able to exercise an option to purchase the motor vehicle by paying UML 2% of the original cost.

A further look at the respondent's witness statement at trial shows the deposits he made towards the repayment of the loan. Paragraph 34 shows

that in July 2009 he paid UGX 500, OOO/= and in August 2009, he paid UGX 7OO, OOO/=. In cross- examination, he testified that he did not repay the entire UGX. 2AM for the month of August 2009. On default of three months, the appellant wrote a demand notice to the respondent dated l4'h April 2009. In that notice, the appellant was demanding for payment of UGX 11, 316,954/= being unpaid installment for three months.

It was stated in the demand notice that failure to pay outstanding arrears would lead to consequences including recalling the credit facility on grounds of default. The respondent received the demand notice on L6/04/2009. In my view, the respondent defaulted at that point. It cannot be rightly argued that because the life span of the entire lease had not expired, failing to meet the monthly obligation did not amount to defaulting. I would find that the terms of the lease offer on repayment were two- fold; monthly payments and completing all the payments within 24 months. As such, failure to comply with the monthly option amounted to defaulting and in effect to breach of the contract between the appellant and the respondent. It is trite that a breach of contract occurs where that which is complained of is breach of duty arising out of the obligation undertaken under the contract. See Jarvis vs. Moy, Davies, Smith, Vandervell & Co. [1936] I KB 399 at 404-

It cannot, therefore, be rightly said that by the time the vehicle was impounded, the respondent had not defaulted in any of the monthly payments. 20

Based on the above, I would find that the learned trial Judge erred in fact when he found that the respondent had not defaulted on his rental payments

under the micro- leasing facility. 25

#### Ground 2

The learned trial Judge erred in fact and in law when he found that the impounding and sale of the suit vehicle by the defendant was unlawful.

Having found under Issue 1 that the respondent defaulted on his rental payments, the question then is; what remedy was available to the appellant.

In the case of Altica Sea Carriers Corporation vs. Ferrostoal Poseidon Bank Reederei GMBH t19761 I Lloyds Rep. 250, Lord Denning stated as follows:

"the aim of the law is to ensure that an innocent party receives his full due and that no rule or equity can compel him to take a loss no matter how minute it may be... an innocent party should be adequately compensated. The only compensation for non tofa is Davment of the debt. The innocent party in other words is entitled to that no loss end and is empowered to achieve it by an action for debt. The contract breaker cannot escape his contractual liability or limit his liability by repudiating it and insisting that such repudiation be accepted by the innocent party." (Emphasis added)

In this case, the appellant had a number of options available to it in order to recover its money. It could sell the leased property or sell the land that had been pledged as security. It opted to sell the suit vehicle. Regarding the argument that the respondent had a'legitimate expectation', this proposition cannot stand. Upon defaulting on the monthly payments, the respondent lost the option of purchasing the motor vehicle at the end of the lease period. This is because the condition precedent was that 'at the end of the lease period, if all the terms have been satisfied, you will be able to exercise an option to purchase the motor vehicle by paying UML 2% of the original cost. See paragraph C (4) of the Lease Offer. By defaulting on the monthly payments, 20 25

the respondent had fallen short of satisfying all the terms and therefore could

not qualify to purchase the vehicle. There could, in the circumstances, not be any legitimate expectation on his part.

In the result, I would answer this issue in the positive and find that the learned trial Judge erred in finding that the impounding and sale of the suit vehicle by the appellant was unlawful.

#### Ground 3

The learned trial Judge erred in law when he awarded the plaintiff a sum of UGX. 62, 2I]-, OOO/= as loss of business when it was not pleaded and proved.

10 Paragraph 4 (e) of the Plaint shows that,

> 'the plaintiff prays for full compensation including return of his ownership of the said motor vehicle oy the full value thereof'.

A further look at Paragraph 10 of the Plaint shows the particulars of special damages. Incidentally, there is no mention of UGX. 62,211, 000/=.

15 20 In the instant case, counsel for the respondent contended that this sum was reflected in the application form containing the summary of financials and was stated as the net profit. I would find that the projection was only designed to convince the Bank to give the respondent the Iease facility. It cannot be relied upon by Court to be estimated business revenue with no prof whatsoever.

Counsel for the respondent argued that the award of UGX 62,211,000/= fell under the ambit of.'any other reliefs to be granted by court'. Even if that was the case, this cannot be a blanket statement that gives courts the power to make all manner of awards. The awards must be proved and properly

25 justifiable. If this Court allowed such relief, we would run the risk of courts making astonishing and unfounded awards, all in the name of 'other reliefs'. In the Indian case of Messrs. Trojan & Co. Vs. RM,N. N. Nagappa Chettiar AIR 1953 SC 235, the Supreme Court considered the issue as to whether relief not asked for by a party could be granted and that too without having proper pleadings. The Court held as under:

"It is well settled that the decision of a case cannot be based on grounds outside the pleadings of the parties and it is the case pleaded that has to be found. Without an amendment of the plaint, the Court was not entitled to grant the relief not asked for and no prayer was ever made to amend the plaint so as to incorporate in it an alternative case."[Para No.29]

ln Bharat Amratlal Kothari Vs. Dosukhan Samadkhan Sindhi & Ors., AIR 2O1O SC 475, the Supreme Court held:

> "Though the Court has very wide discretion in granting relief, the court, however, cannot, ignoring and keeping aside the norms and principles governing grant of relief, grant a relief not even prayed for by the petitioner."[Para No.31l

Courts cannot move themselves and grant reliefs neither sought nor proved by the parties. All relief sought ought to be reasonable. I would, therefore, find that the respondent herein would not succeed in getting a remedy he did not pray for. As such, the learned trial Judge wrongly awarded the respondent a sum of UGX. 62,211,000/= that was neither pleaded nor proved.

Ground 4

The learned uial Judge erred in law when he awarded the plaintiff the value of the suit vehicle in the sum of UGX 37, 500, OOO/= when the plaintiff did not own the same and had not paid the said value.

Having found under ground 1 that the respondent defaulted on his rental payments under the Micro Leasing facility, there was no justification for awarding him the value of the suit vehicle in the sum of UGX 37, 500, O0O/=.

As such, the learned trial Judge wrongly awarded him the same. Indeed, as was rightly observed by counsel for the appellant, that would amount to 'unjust enrichment', and in effect a miscarriage of justice.

This ground would therefore succeed.

s Ground 5

The learned trial Judge erred in law when he awarded the plaintiff the sum of UGX 21,545, OOO/= and UGX 7, 5OO, OOO/= when they were sought by the plaintiff as an alternative to the value of the suit vehicle.

I have already found that the respondent having defaulted on the payment of the lease facility, the appellant rightly impounded and sold the suit vehicle. That aside, even if I were to agree with the learned trial Judge that the vehicle was wrongly sold, upon making the award of UGX 37, 500, 000/= as the value of the vehicle, there would be no need to make a further award of UGX 21, 545, 000 /= and 7, 500, OO0/=. This is because those were sums paid by the 10

- respondent to acquire the vehicle. So, once he is given the full value of the vehicle, there would be no need to re- imburse the money he paid for the vehicle. That would certainly amount to unjust enrichment. This Court cannot uphold it. In the case of Moses v Macfarlane (1760)2 Burr at page f O, it was held that; 15 - "The principle of unjust enrichment requires; first that the Defendant has been enriched by the receipt of a benefit; secondly that this enrichment is at the expense of the Plaintiff and thirdly, that the retention of the enrichment is unjust. This qualifies restitution." 20 - Black's Law Dictionary (supra) defines 'unjust enrichment' at page 1678 as: 25

"The retention of a benefit conferred by another, without offering compensation, in circumstances where compensation is reasonably expected...a benefit obtained from another, not

## intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense."

In this case, the learned trial Judge erred in granting double awards and both, at the detriment of the appellant. The respondent still owed the appellant money. As a result, the Court should have taken that into consideration.

5 Besides, the respondent prayed for the 'return of his ownership of the said motor vehicle or the fuII value thereof'. He could, therefore, not have both.

I would answer this ground in the affirmative.

#### Ground 6

The learned trial Judge erred in law when he awarded the plaintiff special damages in the sum of uGX. 8,77o, ooo/=, UGx 4,2oo, ooo/=, ucx l, L25, OOO/=, UGX 600, OOO/= when not proved, UGX 10,800, OOO/= as the value of the Irish potatoes when not pleaded and proved. 10

It is indeed trite that special damages must be specifically pleaded and proved. In the case of Bonharm Carter v Hyde Park Hotels Ltd (1948) TLR 777, that was cited by counsel for the appellant, Court held that: L5

> "On the question of damages...the plaintiff must understand that if they bring an action for damages, it is for them to prove their damages, it is not enough to write down the particulars and so to speak, throw them at the head of the court saying; this is what I lost; I ask you to give me these damages. They have to prove it..."

In this case, the learned trial Judge awarded special damages of:

UGX. 4,2OO,0OO/= payment for comprehensive insurance;

UGX. 600, 000 /= payment for inspection fee; and 25

UGX. l, L25, 000/= payment of arrangement fees of 3%

Whereas these sums were stated in the particulars of special damages, there was need to prove that the respondent suffered loss due to the appellant's actions. First of all, these were sums he paid to obtain the lease facility and he signed the Lease offer, fully aware that these fees were mandatory. Hadn't he paid them, the appellant would not have disbursed the funds it did to enable him acquire the motor vehicle. As such, I do not see how those fees can be claimed as loss suffered by the respondent.

The law that governs the award of special damages is well established. In Stanbic Bank Ltd v Kiyimba Mutale; SCCA No. 2 of 2O1O, the Supreme Court held that:

> "...special damages must be specifically pleaded and proved as having been suffered by the person claiming them...

> Special damages cannot be based on speculation and that if the award of UGX. 115, 056, 960/ in that case was meant to be special damages, then it has no foundation in law or in fact."

In this case, the respondent was also awarded ucx 10,800, ooo/= being the value of the Irish potatoes that were allegedly on the vehicle at the time it was impounded. This value was neither pleaded nor proved. It was only mentioned in paragraph 39 of the respondent's witness statement. I need not reiterate that special damages must be specifically pleaded and proved. That did not happen here. And as such, the learned trial judge had no basis for awarding that sum to the respondent.

The other special award made by the learned trial Judge was in the sum of UGX 8, 770, 000/=, being the cost the respondent incurred in repairing the motor vehicle while it was in his custody. A look at the Lease offer, shows that there was a provision for 'other terms and conditions'. Item 2 on maintenance provides:

"Yott will be responsible for maintaining the motor vehicle in good working order."

5 The respondent appended his signature to the Lease offer that required him to maintain the vehicle. This begets the question; why would he (the respondent) be re- imbursed for the costs he incurred in maintaining a vehicle that he was using?

That aside, as already found in the grounds above, the appellant was entitled to impound and sell the vehicle and in that case, did not occasion the respondent any damage or loss that would warrant payment of special damages. I would, therefore, answer this ground in the affirmative.

#### Ground 7

On the whole, based on the findings on grounds 1-6, I would find that the learned trial Judge erred in law and fact when he failed to properly evaluate the evidence and thereby came to wrong conclusions.

Regarding the counterclaim, it was not disputed that at the time of impounding the suit vehicle, the respondent had paid UGX 21, 545, OOO/=. That left an unpaid balance of UGX 15, 955,000/=. It was the appellant's testimony that the motor vehicle was sold at ucx 14, 000, ooo/=. whereas the appellant claimed that the vehicle was impounded and sold on 4,h December 2009, and the respondent claimed that the vehicle was impounded 15 20

That being the case, I would find that taking into account the sums the respondent had already paid to the appellant before defaulting, plus the sum obtained from selling the motor vehicle, the respondent only owes the

on August 30, 2009, neither of the parties attached proof of these allegations.

appellant UGX 1,955,000/=. The same shall be payable at court rate with effect from the date when the counter claim was filed on 04'h June 2010. In Shell Uganda Limited v Captain Naeem Shair Chaudry; Civil Appeat No. 32 25

of 201O, this Court cired SIETCO v Noble Builders Ltd; Civit Appeat No. 31 of 7995, where the Supreme Court held that:

> "where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interest from the date of filing suit."

In the result, this Appeal succeeds with costs to the appellant, both here and in the court below.

lrl 10 Dated at Kampala this . day of.... 2023 "0

C ar teera Deputy Chief Justice

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA (CORAM: BUTEERA, DCI, BAMUGEMEREIRE & MUSOTA,IIA) CIVIL APPEAL NO. 10 OF 2016

EQUITY BANK (U) LTD: :: APPELLANT VERSUS

HAMEYIMANA RICHAR RESPONDENT (An appeal arising from the decision of Henry Peter Adonyo, J in High Court Ciztil Suit No. 71a of 2013 at Commercial Diztision, ludgrnent dated 14trt lul!

20.t5)

#### TUDGMENT OF BAMUGEMEREIRE, IA

I have had opportunity to carefully consider the opinion, in draft, of the I{on. Justice Richard l}uteera, DCJ. I agrec with thc rcasoning and with his resolution of the grounds of appcal.

I would allow this appeal with costs to the appellant in this court and in the court below.

Dated at Kampala this % v day of @2 .2023.

@\*

CATHERINE BAMUGEMEREIRE IUSTICE OF APPEAL

### THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT I(AIVIPALA

## CIVIL APPEAL NO. 10 OF 2016

EQUITY BANK (U) LTD : : : : : : : : : : : : : : : : : : : : : : : : : : : 3 : : : : : : : : : APPELLANT

#### VERSUS

#### HAMEYIMANA RICHARD :::::::::::::::::::::::::::: RESPONDENT

## CORAM: HON. JT STICE RICHARD BUTEERA, JA HON. JUSTICE CATHERINE BAIVIUGEMEREIRE, JA HON JUSTICE STEPHEN MUSOTA, JA

#### JUDGMENT OF HON. JUSTICE STEPHEN MUSOTA. JA/JCC

I have the benefit of reading in draft the judgment by my brother Hon. Justice Richard Buteera, DCJ.

I agree with his analysis, conclusions and the orders he has proposed.

Dated this day of 2023 # €\*4

Stephen Musota JUSTICE OF APPEAL