Lubuulwa v Standard Chartered Bank (HCT - OO - CC - CS - 355 - 2008) [2011] UGCommC 2006 (8 November 2011)

Full Case Text

## THE REPUBLIC OF UGANDA

## COMMERCIAL COURT DIVISION IN THE HIGH COURT OF UGANDA AT KAMPALA HCT - OO - CC - CS - 355 - 2008

PLAINTIFF I. A J BUULWA TONY

## VERSUS

DEFENDANT STANDARD chartered bank

#### BF. FQRE: THE HON. JUSTICE GEOFFREY KIRYABWIRE **—***--------------- —* **»**

## **J U D G M E N T**

The plaintiff filed this suit against the defendant, for an order for specific performance, compelling the defendant to hand over to the. plaintiff a grand prize of a house worth USD \$ 40.000 which the plaintiff alleges that he won under a 'smart credit repayment Holiday promotion' (herein after referred to as the "Promotion") that was run by the defendant. *I* I he. plaintiff also prayed for recovery of the sum of GBP £2000, as monies that were be . awarded to him by the defendant as restrictive shares in the month of March 2008 for his excellent performance in the year 2007, having collected for the defendant a sum of Ushs 8.750,834,269/=, general damages for breach of contract, mental and emotional stress, and inconvenience, special damages for causing colossal financial loss and punitive damages. The plaintiff also seeks a declaration that he was the winner ofthe grand prize of a house in the said promotion.

of USD \$ 40,000 being In the. alternative, the plaintiff prayed for the recovery of the sum the e.niivalent value, of the sum ofthe grand prize under the said promotion. .

The brief facts of the case are that plaintiff worked for the defendant as its personal financial consultant. The defendant ran a promotion 'smart credit repayment Holiday promotion' in the month of April 2007 and the purpose of the promotion was to award a grand prize of a house worth USD \$ 40,000 or its equivalent in monetary terms to any employee who would collect or book a sum of Ushs 3,500,000,000/= in incremental loans, with an average collection of Ushs 8o,ooo,ooo/=per week. The plaintiff participated in the promotion and avers that he collected Ushs 3,750,834,169/=^ incremental loans which was over and above the target that was set by the defendant of Ushs 3,500,000,000/=, by a sum Ushs 250,834,169/=- Having collected Ushs 3,750,834,169/= the plaintiff avers thathe became the winner of the grand prize.

Furthermore, the plaintiff avers that consequent to the satisfactory performance, in collecting for the defendant Ushs 3,750,834,169/=, in the year 2007, he was awarded a sum ofthe GBP £2000 by the defendant, as restrictive shares in the said defendant bank in the month of March 2008, which he was to receive upon his retirement or resignation.- However to date, the said shares have never been awarded to him by the defendant. The plaintiff resigned from employment with the defendant on 25th May 2009.

In its defence, the defendant denied the allegations that the plaintiff achieved the threshold of Ushs 3,500,ooo,ooo/=which was required for the grand prize, but instead booked Ushs 2,099,169,083/= in incremental loans which was not sufficient to earn him the grand prize. The defendant also acknowledged the plaintiff as a good performer and contended Inal the plaintiff was indeed awarded the GBP £2000, in the Standard Chattered PLC, but stated that the said shares are a discretionary bonus governed by the terms and conditions, u hich would be lost when the plaintiff left the service of the defendant, within a period of 3 >e<u s, just as the plaintiff did, when he left hisjob voluntarily.

1 he issues proposed for trial were as follows;

**1.** Whether the plaintiff fulfilled the conditions of the promotion by booking a sum of Ushs 3,750,834,169/= in loan collections to entitle him to the grand prize of USD \$ 40,000 or its monetary equivalent thereof by the defendant.

- 2. Whether the plaintiff is entitled to the GBP £2000 he was awarded in restrictive shares. - $3.$ What are the remedies available to the parties?

The plaintiff was represented by Mr. Eric Kiingi, while the defendant was represented by Mr. Ebert Byenkya. The plaintiff testified on his own behalf while the defendant bank had two witnesses, Hellen Basuuti Nangonzi (DW1) and Yustus Aribariho (DW2).

I will proceed to resolve the issues proposed by the parties for trial. In resolution of these issues, I find as follows:

## Whether the plaintiff fulfilled the conditions of the promotion by Issue 1: booking a sum of Ushs $3.750.834.169/$ = in loan collections to entitle him to the grand prize of USD \$ 40,000 or its monetary equivalent thereof by the defendant.

According to the testimony of the plaintiff, the Bank through Yustus Aribariho its head of marketing, rolled out the promotion dubbed the 'smart credit repayment Holiday promotion' on the 2nd April 2007 to end on 30th December 2007. Under this promotion which the plaintiff participated in, the staff of the defendant were supposed to deliver Ushs $3,500,000/$ = or its equivalent of US\$ 1,900,000/= in new loans in order to be awarded the grand prize of a house. The participants were supposed to collect a mixture of both new and top-ups on old loans based on the power point presentation made to the participants. The presentation shows that, "any PFC (Personal Financial Consultant) were to book six new loans or four new loans with six top-ups or ten loans of whatever mix". According to the plaintiff, "loans of whatever mix" meant "...top-up or new loans". The plaintiff testified that though he made the promotion mark he was never given the grand prize of a house. The plaintiff testified that when he demanded for the prize from the Value Centre Manager, Mrs. Grace Muliisa and she called him to her office and told him that she did not want to hear stories of the house again, but she did not give any reasons for her statements. He also went to Mr. Herman Kasekende the Head of Consumer Banking at the defendant bank, and when he told him about his story concerning the grand prize, Mr.

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Herman Kasekende lost his temper and sent him away. The plaintiff contended that to date, the bank is continuing to make profits from the loans booked by him since 2007.

kThe plaintiff testified that apart from the verbal power point presentation, there was no follow up document detailing the procedure to be followed while competing for the grand prize which was the house. The plaintiff contended, under cross examination that the defendant had not been particular as to what kind of loans it wanted the employees to book in order to win the grand prize and therefore it did not matter what kind of loans the employee booked. He further testified that what the bank was interested in the ultimate target of the sum of Ushs 3,500,000,000/= and relied a bank statement marked annexure 'E' which showed that Ke had collected and booked loans worth Ushs 3,750,834,169.

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The defendant's case, according to the testimony of Yustus Aribariho, the defendant's officer who ran the promotion is that in addition to the power point presentation, he also made a verbal presentation. He testified further that the promotion was loans from new customers or top-ups on existing loans that were required to be booked in'order for one to win the grand draw and this was discussed orally at. the formal presentation. The Campaign ran from January to December 2007 and the plaintiff in this regard booked about Ushs 2,089,000,000/=. Mr. Aribariho relied on a bank statement, mhfkfed '^A'- which showed a combination of loans comprising new customers that the plaintiff brought in and those customers who were already existing in the bank. Column 4 of this document showed the total exposure of all customers the plaintiff interacted with, while column 5 showed the exact new money that the plaintiff managed to bring in under the promotion. During cross examination Yustus Aribariho, testified that the house was not in existence at the time the presentation was rolled out, but he stated that they would buy the house in Lubowa estates. The witness further testified that there was no other document in addition to the power point presentation. This was because it is not normal at Standard Chartered Bank to issue memos when they do a promotion. People who had missed the presentation would call him to find out or send him an email to find out what the promotion was about. *2. o*

According to the testimony of Yustus Aribariho, to win the grand draw, one had to boo1 sales of Ushs 3,500,000,000/= in loans during 2007. He testified that the term 'book' is

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term of art in Standard Chartered Bank lingua, well understood within the bank to mean bringing in new money over and above money already lent out and entered in the bank's books; that is money that the bank did not have. This culture was however not documented but was embedded in the bank's orientation programs. He testified further that the plaintiff being a senior sales person knew the meaning of the word 'book' in Standard Chartered I^ank. The same witness testified that the defendant bank presented a complete breakdown of the plaintiffs sales in 2007 and the plaintiff in cross examination accepted the factual accuracy of the document presented by the bank. The document presented by the bank had five columns. TJie total sum for the fourth column was Ushs 3,750,834,169/= while the total sum for the fifth column was Ushs 2,089,169,083/=. According to Yustus Aribariho, the document shows that the plaintiffs total amount in loans collected was Ushs 3,750,834,169/= as shown by the fourth column, while the total amount in new loans and top-ups amounted only to Ushs 2,089,169,083/= as shown by the fifth column and thus the plaintiff did not meet the target of Ushs 3,500,000,000/= for the prize. •

Having considered the evidence on record and the submissions of both counsel, the issue therefore is whether the plaintiff actually booked loans of Ushs 3,750,834,169/=, over and above the target of Ushs 3,500,000,000/= set by the defendant.

The defendant's case is that the plaintiff had only collected Ushs 2,089,169,083/= and thus did not meet the target of Ushs 3,500,000,000/= for the prize. -

Brom the evidence it is clear that the terms of the promotion could only be derived from the power point presentation made by Mr. Aribariho. To my mind a power point presentation is a presentation aid and is rarely made in any significant detail. This can cause interpretation and understanding problems. In this case there seems to be a divergence of understanding as to what amount of money was booked by the plaintiff for purposes of this promotion. The promotion can be seen as a representation to which the • QjJ Plaintiff and other staff relied upon to contest in the said promotion. The issue is whether there was a corporate understanding within the defendant bank as to the meaning of booking for purposes of this promotion.

Sect ion 15 ofthe Evidence Act provides

*"...when there is a question whether a particular act was done , the existence ofa course ofbusiness, according to which it naturally would have been done is a relevantfact..."*

Some analogy can be imported from the law of contract on this point. In the book, "TREITEL, THE LAW OF CONTRACT" 12th Ed (2007) by Edwin Peel at Par 6-023, the author notes that, evidence of custom is admissible to annex incidents to written contracts in matters with respect to which they are silent. It is generally said that the evidence can be used to add to, but not to contradict the written contract. Thus the evidence can not be used where the custom if actually written into the contract would make it 'insensible or / O inconsistent'

According to HARLSBURY'S LAWS OF ENGLAND 4th ED Vol. 9(1) at par 780, It has long been settled that in commercial transactions extrinsic evidence of custom is admissible to annex incidents to written contracts in matters with respect to which they are silent... Thus in the absence of a contrary intention, a court can import into the contract any local / *C?* custom or usage which is notorious, certain and reasonable and provided that it can be proved that the custom or usage normally governs the particular type of contract in question, it will be regarded as part of that contract in precisely the same manner it had been expressly agreed to by the parties.

Furthermore, to prove the existence of a custom is a matter of evidence. The court of 2^0 Appeal has held in the case of KIBALAMA V. ALFANSAN BELGIE CVBA [2OO4]2 EA 146, while quoting Sir Charles Newbold P, in HARILAL V. STANDARD BANK [1967] EA 512 at 5-16, that,

> *"As a trade usage, may be described as a particular course of dealing between parties who are in a business relationship, which of course the dealing is generally known to allpersons who normally enter into that relationship that they must be presumed to have intended to adopt that course of dealing and to have incorporated it into their contractual relationship unless by agreement it is expressly or*

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*impliedly excluded. Before a course of dealing can acquire the character of a trade usage it must first be so well known to the persons who be affected by it that any such person when entering into a contract of a nature affected by the usage must be taken to have intended to be bound by it; secondly be certain in the sense that the position of each of the parties affected by it is capable of ascertainment and does not depend on the whim of the other party; thirdly, be reasonable that is, that course of dealing is such that reasonable men adopt it in the circumstances ofthe case; andfinally, be such as is not contrary to legislation or to some principle oflaw.. A trade usage must be proved by calling witnesses, whose evidence must be clear, convincing and consistent, that the usage exists as^ a fact and is well known and has been acted on generally by persons affected by it."*

Krom the testimony of Yustus Aribariho, the term 'book' in the Standard Chattered lingua, meant bringing in new money that the bank did not have in the first place, and that the plaintiff as a staff of Standard Chartered Bank should have known this. In other words knowledge of a custom is being imputed here.

relied upon by the parties here. The plaintiff In addition two different documents were relied on a document marked PE 4 as proofthat he booked loans of Ushs 3,750,834,169/=, while the defendant relied on another one that showed that the plaintiff had actually Ushs 2,089,169,083/= and therefore he did not meet the target of Ushs 3,500,000,000/=.

both documents on the face appear to be similar and originated from the same defendant bank only that the document relied upon by the defendant has 5 columns while that of the Plaintiff has four. Column 4 of both documents appear to be the same in that they have the same total of Ushs 3,750,834,169/= but column 5 in the statement from the defendant has another total of Ushs 2,089,169,083/= said to reflect the new money in column 4.

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**/p** 'rhe only query that arises in this respect is why the plaintiffs document which is undoubtedly from the bank has 4 instead of 5 columns and thus would appear to be incomplete. This raises serious questions with regard to its authenticity. If the plaintiff obtained this document from the defendant bank which authored the document, why then would the plaintiff be unable to obtain the complete document?

In light of these queries raised by the plaintiffs document, the burden of proof in ciyil matters lies on the plaintiff to prove his case on the balance of probabilities as held in the case of SEBULIBA V COOPERATIVE BANK [1982] HCB 129. On a balance of probabilities therefore, I am more persuaded to rely on the document presented by the defendant bank since it appears more complete and provides more information than that of the plaintiff and thus, appears to be more genuine than that of the plaintiff..

Furthermore, reference to the custom of the meaning of the term "book" as testified by Yustus Aribariho, appears to me to be clear, convincing and consistent as a well known ' custom within the defendant bank in the course of its business.

I find that the sums that were recorded by the defendant as having been collected by the plaintiff was Ushs 2,089,169,083/=. It follows therefore, that the plaintiff did not hit the target of Ushs. 3,500,000,000/=.

1 would like to note however that the conduct of the defendant regarding this issue was found to dilatory. The defendant failed to make available the document it relied upon regarding the loans collected by the plaintiff available to the plaintiff and as a result, the Plaintiff testified that he saw the document for the first time in court. Had the defendant made available that document to the plaintiff, it is my considered opinion that the plaintiff would probably never have instituted the suit, having ascertained the exact value of inci emental loans that the plaintiff booked.

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#### **Issue** 2: **Whether the plaintiffis entitled to the GBP £2000 he was awarded in restrictive shares.**

The plaintiff testified that he was to be given GBP £2,300 in restrictive shares because of his exemplary performance and that it was anticipated that this award would be granted in March 2008. The plaintiff further testified that he expected to receive the share certificate by the end of April 2008. The plaintiff also testified that he neither got the shares, nor received any documentation regarding the shares.

The plaintiff testified that he was seeing the document presented by the defendant (the terms and conditions for the restrictive shares marked as Exhibit D2) for the first time in court. The plaintiff testified that the said document was never given to him by the *) ■£>* defendant to sign. In cross examination, the plaintiff testified that he tried searching the • websites about the restrictive shares but some of the websites were restricted and therefore he could not access them. The plaintiff testified that when he inquired from a one Mr. David Idoru, who gave him a letter informing him that he had been awarded the shares (the letter of 19th February 2008 marked as Exhibit P6), but Mr. Idoru advised the plaintiff to talk to his superiors.

Counsel for the plaintiff in his submissions stated that the letter of 19th February 2008 issued to the plaintiff about the restrictive shares did not show the manner in which the plaintiff was to receive the said share certificate.

Resource On the other hand, the defendants conns . submitted that thein tw0 shares parts. haveTheterms first was and conditions, but the most significant term is \* ^antee was stqi employed by the to be. at the second anniversary of the subjed to the same conditions of defendant and the second part on defendant also submitted that the terms also. remaining in employment. Counsel 01 te wouId lose hjs entitlement which was provided that upon leaving employment, the P . Hellen Basuuti Nangonzi testified the case, because the plaintiff had voluntarib ie § £ree|y available on the company that the information regarding the restricted si , would be addressed to the Human computers and that any questions regarding the Appnrdin£ to her, the fact that Resource or **the** person vfho gave **them** the **letter of grant. Accor**

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the defendant did not get a share certificate was not important since the award certificate would entitle him to the shares after 2 years.

I am a little bit surprised at the amount of information that was made available to the defendant at the time he qualified for the restrictive shares. Despite the fact that the terms were not brought to the notice of the plaintiff at the time of the grant, the plaintiff was informed that the shares were restrictive. The plaintiff was also informed that the information regarding the shares was to be found on the company's websites. The plaintiff in his testimony informed court that he did not find out why the shares were "restrictive". Hellen Nasuuti Nangozi a beneficiary under the defendant's restrictive share scheme testified that when she was offered the shares, she obtained information regarding the shares from the company websites.

The term "restriction" in BLACKS LAW DICTIONARY 7th Ed. Bryan A Garner at pg 1316, ids defined to mean,

*''(1) a limitation or qualification, (2) a limitation (especially in a deed placed, on the use or enjoyment ofproperty"*

I therefore find that the term "restrictive" shares implies a limitation on the enjoyment of these shares and thus, should have put the plaintiff on notice to establish the scope of the limitation. I therefore find that the plaintiff having testified that he did not find out why the shares were restrictive, did not exercise due diligence. Based on the terms of the shares, I further find that by the plaintiff leaving the employment of the defendant bank before the maturity of the shares is not entitled to the GBP £2000 he had otherwise Qualified for.

# Issue 3: What are **the** remedies available to **the** parties?

ln light of the above resolution of issues .1 and 2, where I found for the defendant, I find tlat' the plaintiff is not entitled to the remedies as prayed I hereby dismiss the suit accordingly.

*IO*

*IS*

With regard to costs, S.27 of the Civil Procedure Act allows for costs to a successful litigant. In the case of UGANDA DEVELOPMENT BANK V MUGANGA CONSTRUCTION CO. LTD [1981] HCB 35, a successful party can only be disentitled costs if it is proved that but for his conduct; the action would not have been brought. The costs should follow the event.

I noted that the conduct of the defendant regarding this case was found to be dilatory. The defendant failed to make available the document regarding the loans collected by the plaintiff and as a result, the plaintiffsaw the document for the first time in court. Even the Court had to press hard to get hold of the same document. Had the defendant made available that document to the plaintiff, it is my considered opinion that the plaintiff would probably never have instituted the suit, having ascertained the exact value of incremental loans that the plaintiff booked.

Furthermore, I also found that the defendant failed to make available the terms and conditions regarding the restrictive shares in due time, to the plaintiff. I cannot understand why such a simple but important bitsof information was not made available to the banks otherwise star employee.

For these reasons I hold that each party bear its own costs.

Ju: ice Geoffrey Kiryabwire

JUDGE

Date.

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08/11/07 9:50am

## Judgment read and signed in Court in the presence of;

Pear] Nahabwe h/b for E. Byenkya for the Defendant

In Court

- No parties - Rose Emeru Court Clerk

Justice Geoffrey Kiryabwire

JUDGE

*Chihlif Datef*

The Republic of Uganda

#### IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION)

#### H. C. C. S NO. 355 OF 2009

**IUBUULWA TONNY** $\begin{array}{cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc$ **PLAINTIFF**

DEFENDANT

#### **VERSUS**

STANDARD CHARTERED BANK (U) LTD ::::::::::::

### **DECREE**

This suit coming up for final disposal this 8th day of November 2011 before His Lordship Hon. MR. JUSTICE GEOFFREY KIRYABWIRE in the presence of MS. PEARL NAHABWE h/b for MR. EBERT BYENKYA Counsel for the Defendant and in the absence of either the Plaintiff or his Counsel; IT IS HEREBY ORDERED and DECREED as follows:-

a). THAT the Plaintiff's suit be and is hereby dismissed.

b).**THAT** each party bears their own costs.

GIVEN under my hand and seal of this Honorable Court this .................................... $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{L}$ $\mathcal{$

**REG:**

Drawn & Filed by: Eric- Kiingi & Co. Advocates Solicitors, Legal and Real Property Consultants Plot 4, Pilkington Road, Fami House (3rd Floor, Rm No. 51) P. O. Box 28661. Kampala.

$907065$

$18 || 120 ||$