Mugerwa & Another v Uganda (URA) (Miscellaneous Application 15 of 2021) [2022] UGSC 26 (27 January 2022)

Full Case Text

# IN THE REPUBLIC OF UGANDA AT THE SUPREME COURT OF UGANDA AT KAMPALA MISC. APPLICATION NO. 15 OF 2021

#### **BETWEEN**

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## **MUGERWA DOMINIC** <table> MUHWEZI ABIAS APPLICANTS

#### AND

## UGANDA (URA)::::::::::::::::::::::::::::::::::::

[An application for bail pending appeal arising from Criminal Appeal No.75 of 2021, which arose from Criminal Appeal No.317 of 2015 of the decision of the Court of Appeal at Kampala (before Kiryabwire, Bamugemereire and Kasule, JJA) 20 dated 3rd December, 2021 which in turn arose from Criminal case No. HCT-00-AC-SC-0004 of 2015 of the High Court at the Anti-Corruption Division.

## BEFORE: HON. JUSTICE PROF. LILLIAN TIBATEMWA-EKIRIKUBINZA, JSC.

**Summary: Bail pending appeal-** The conditions to be satisfied in an application for grant of bail pending appeal are different from those required for bail pending trial.

> **Bail pending appeal-** The threshold for grant of bail pending appeal is proof of exceptional and unusual circumstances.

**Representation:** The applicants were represented by Mr. Bakole Simon of M/S $25$ Baks & Co. Advocates. The respondent was represented by Hilda Bakanasa of M/S Uganda Revenue Authority (URA).

> The applicants attended court via video-link from Murchison Bay Prison.

This application was brought by a Notice of Motion under **Articles 2**, 126 (2) (e) of the Constitution, Section 132 (4) of the Trial on Indictments Act, Section 40 (2) of the Criminal Procedure Code Act and Rule 6(2), 41 (1) and (2) of the Supreme Court Rules wherein counsel prayed for orders that:

- 1. The applicants be released on bail pending the hearing and determination of their appeal vide Criminal Appeal No.75 of 2021. - 2. The costs of this application abide the result of the said appeal.

The common grounds upon which the motion is premised are that:

- a) The applicants have filed a Notice of Appeal in this Court and the appeal has high chances of success. - b) The appeal may not be heard without substantial delay. - c) There are existing grounds for the grant of bail pending appeal like substantial sureties, permanent place of abode within the jurisdiction of Court and possession of valuable property sufficient to secure the applicants' attendance in court. - d) The applicants were previously granted bail by the High Court as well as the Court of Appeal and complied with all the bail terms. - e) The offences with which the applicants were charged and convicted did not involve personal violence. - f) The applicants are the bread winners in their respective families with dependent minor children who need their care and attention.

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- The respondent filed an affidavit in objection to grant of bail sworn $\mathsf{S}$ by Christa Namutebi, an advocate in the Legal Services and Board Affairs Department of URA. She deponed as follows: - 1. That paragraph 1 1 of the affidavits in support of the Application by the $1^{st}$ and 2nd Applicants is only admitted to the extent that the Applicants have filed a Memorandum of Appeal in this Court. - 2. That in response to paragraphs 12 to 21 of the Affidavits in support of the application by the applicants, the averments do not demonstrate existence of unusual and exceptional circumstances necessary for grant of bail at this stage. - 3. That the applicants are a flight risk having been convicted and sentenced by the High court and the same confirmed by the Court of Appeal. - 4. That the applicants having been convicted are no longer presumed innocent and are likely to abscond if granted bail. - $25$

#### **Background:**

The $1^{st}$ and $2^{nd}$ applicants were employees of Uganda Revenue Authority (URA) in the Domestic Taxes Department stationed at Jinja working as supervisor and revenue officer respectively.

- It was the case for the Prosecution that between January and 30 September 2014, the duo, within the scope of their employment, falsely and fraudulently audited, verified and approved a claim for VAT refund of a tax payer M/S Rising Star Commodities Limited, leading to a loss of UGX. $6,452,116,773$ = to their employer- URA. - The said Company had falsely claimed that it had exported brown 35 sugar it had bought from Kakira Sugar Works Ltd to a Kenyan Company known as Gemini Traders Ltd and on the basis of the said export, the said company as an exporter claimed for VAT Refunds. The applicants were tasked as employees of URA to verify and audit

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the said claims for VAT Refunds by the claimant Company. The $\mathsf{S}$ Applicants purported to have audited, verified and approved the said claim. Subsequently, the VAT refunds were paid out to the claimant Company.

However, it later turned out that the alleged exports by Rising Star Commodities Ltd had not been made at all or in full as claimed by $10$ the claimant Company. The applicants were suspected of having committed criminal offences by their failure to verify the exports prior to approval of payment to the claimant company of the VAT refunds.

Consequently, the applicants were jointly charged with the offences of abuse of office contrary to section $11(1)$ , causing financial loss 15 contrary to section $20(1)$ , and false claims of officials contrary to the section 24 of the Anti-Corruption Act, 2009. Each of these offences had a total of 7 counts, making a total of 27 counts in the charge sheet. The applicants denied all the charges.

- At the trial in the High Court (Anti-Corruption Division) the $20$ Prosecution adduced evidence of 18 witnesses. Each of the applicants denied committing the offences. At the conclusion of the trial, the trial Judge found the applicants guilty, convicted and sentenced each one of them to 5 years imprisonment on each count of abuse of office, - 10 years imprisonment on each count of causing financial loss and $25$ 2 years imprisonment on each count of false claims by officials. The sentences were to run concurrently. Furthermore, each one of the applicants was disqualified from holding a public office for a period of 10 years. No order of compensation of the money was made on the ground that there was a third party who had benefitted from the 30 transaction.

Dissatisfied with the conviction and sentences, the applicants lodged an appeal in the Court of Appeal. The Court of Appeal upheld both the convictions and sentences.

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The applicants were still dissatisfied with the decision. They appealed $\mathsf{S}$ to this Court vide Criminal Appeal No.75 of 2021 from which the application for the grant of bail pending appeal arises.

#### Applicants' submissions

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Counsel submitted that the applicants have satisfied the conditions for grant of bail pending appeal. $10$

That the applicants have no previous criminal record, the offences they were convicted of did not involve personal violence, they duly complied with the bail terms in the lower courts and that they are bread winners in their respective families. Furthermore, that the applicants have fixed places of abode in Ssenge, Nabweru, Wakiso 15 District and Seguku, Wakiso District respectively within the jurisdiction of this Court. Counsel adduced copies of the introduction letter from the Area Local Council 1 for each of the applicants as well as copies of the applicants' National Identity cards to support this fact.

Counsel also submitted that the grounds of appearing in the Memorandum of Appeal are not frivolous. Counsel further submitted that there is a possibility of delay in the determination of the appeal given the fact that the appeal has recently been filed in Court. That

premised on this fact, there is no way the applicants' appeal can be $25$ heard expeditiously given the busy schedule of the Court and the only remedy would be to grant the applicants bail.

Furthermore, counsel submitted that the applicants have sureties who know their duties and will ensure that the applicants maintain their previous record of answering bail conditions set by Court.

Counsel introduced the sureties as follows:

For the $1^{st}$ applicant (Dominic Mugerwa):

- 1. Mrs. Naggujja Rosemary Mugerwa, wife of the applicant residing in Ssenge Naluvule Parish, Wakiso District. National Identity Card No. CF790521032E7C - 2. Mr. Kayabula John Bosco, counsin brother of the applicant residing in Nabbingo, Kiyanja cell and an employee with Makerere University Printery, staff I. D No. 0232.11.1881. - 3. Mr. Kiwanuka John Kasule, brother in law to the applicant residing at Nazziba cell 2 Seguku ward, Makindye Ssabagabo Municipality in Wakiso District. National Identity Card No. CM6803210992VC.

For the 2nd applicant (Muhwezi Abias):-

- 1. Mr. Muhanguzi Obadiah 38 years old, brother to the applicant, a Senior Procurement Officer in Mulago Hospital, a resident of Kimyanyi Village, Kira Division Wakiso District. National Identity Card NO. CM830841004NEC. - 2. Eng. Buhanda Brian 41 years old, cousin to the applicant, General Manager at the National Enterprise Corporation, ,a resident of Bugolobi Flats Block 25-33 Zones Nakawa Division KCCA. National Identity Card No. CM80101106595D. - 3. Mr. Ahabwe John 49 years old, brother to the applicant, head tax & economic policy, Movit products, a resident of Kabojia A

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Cell, Kasenge Parish, Kyengera Town Council, Wakiso District. National Identity Card No. CM72034102PIPA.

Counsel prayed that the sureties presented be considered substantial since they are aware of their duties and are close relatives of the applicants. Counsel also emphasized that the said sureties were the same persons who stood surety for the applicants in both the High Court and the Court of Appeal.

#### **Respondent's reply**

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On the other hand, the respondent's representative opposed the application. Counsel strongly argued that although the offence did 15 not involve personal violence, it is still of a serious nature since colossal sums of money to the tune of Ugx. $6,452,116,773$ were lost which had an adverse effect of the revenue collection. That this makes the applicants fall short of the conditions for grant of bail pending appeal. 20

Counsel further argued that although the applicants honoured the bail conditions in the previous courts, the circumstances had since changed with the conviction from two courts. That there was therefore a greater temptation for the applicant to abscond bail. In

- support of this submission, counsel relied on the authority of $25$ **Chimambhai vs.** $\mathbb{R}^1$ wherein Harris J held that, an appellant under sentence of imprisonment seeking bail lacks one of the strongest elements normally available to an accused person seeking bail before trial namely that of presumption of innocence. - On the issue of delay in determining the intended appeal, counsel 30 submitted that the assertion is speculative since the applicants did not furnish any cogent evidence to that effect. That instead, delay should be assessed in light of whether there is risk of the applicants

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&lt;sup>1 (No.2) [1971] 1 E. A 343. serving their sentences or a great portion of it before the appeal is $\mathsf{S}$ heard as was held in **Henry Bamutura vs. Uganda2**.

Concerning the sureties, counsel did not object to any of the individuals presented before the Court.

In conclusion, counsel prayed that the Court declines to grant the application. $10$

## Rejoinder

In rejoinder, counsel reiterated that the applicants have previously been released on bail despite being convicted. That this is one of the key persuasive factors since court will be hesitant to grant bail to a person who has previously not complied with bail terms set by

15 court.

In the same vein, Counsel submitted that the *ratio* in the authority of **Chimambhai vs. R (supra)** relied upon by the respondent was quoted out of context. That had counsel read the entire case, she 20 would appreciate that the Judge in that case maintained the presumption of innocence of an applicant for bail pending appeal despite conviction. Counsel submitted that the aforementioned case in fact supports the applicants' case and prayer for bail pending appeal.

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Counsel further submitted that factors such as the nature of the offence (whether it is violent or not) do add value to the case.

Counsel also submitted that the applicants' intended appeal has a 30 high likelihood of success. That the applicants were convicted for causing financial loss of colossal sums of money which they never took for their benefit. That the applicants simply followed the Tax Refund Manual to approve the refund which was within the scope of

&lt;sup>2 Miscellaneous Application No.9 of 2019.

- their job description. It was the same verification, approval and $\mathsf{S}$ documents used by the respondent to resolve the dispute with the tax payer of which it was discovered that the Company was paid three billion Uganda shillings in excess. Counsel stated that the said excess money was refunded by the company to the respondent - but the applicants were still being prosecuted. That therefore the 10 essence of the pending appeal is for Court to re-evaluate such evidence.

Counsel also distinguished the **Bamutura case (supra)** relied upon by the respondent. That whereas the offences in that case and the 15 present case are similar, the facts are distinguishable. That different from the Bamutura case, the applicants in the present case did not take the said money for their benefit.

Lastly, counsel submitted that the Rules of this Court do not $20$ compel an applicant to have a Record of Appeal in order for them to apply for bail.

## Consideration of the application

I have considered the pleadings and submissions by both counsel $25$ together with the relevant laws.

**Rule 6(2) (a)** of the **Rules of this Court** provides for the grant of bail pending appeal to an applicant as follows:

$(2)$ ... the institution of an appeal shall not operate to suspend any sentence or to stay execution, but the Court may-

(a) in any criminal proceedings where a notice of appeal has been given in accordance with rules 56 and 57 of these appellant order that the be released rules. $on$ bail.....pending the determination of the appeal."

I note that the applicants have complied with the above rule and filed $\mathsf{S}$ a Memorandum of Appeal in this Court as seen from annexure "J" of the application.

I must however from the onset emphasize that bail whether pending trial or pending appeal is granted at the discretion of court which discretion must be exercised judiciously with each case being determined on its own merit.

I have previously held in **Henry Bamutura vs. Uganda (supra)** that after conviction, the legal status of an offender changes and the consideration for release hinges on whether there are exceptional

- and unusual circumstances warranting release pending appeal. 15 This is because the applicant is no longer wholly shielded by the presumption of innocence espoused in **Article 28 (3)** of the **Constitution.** This decision was cited with approval by this Court in Nakiwuge Racheal Muleke vs. Uganda3 - a reference before a - bench of three Justices. Similarly, in **Chimambhai vs. R (supra)**, $20$ Harris J held that it is manifest that the case of an appellant under sentence of imprisonment seeking bail lacks one of the strongest elements normally available to an accused person seeking bail before trial - namely that of presumption of innocence. - It follows that the principles which apply to applications for bail $25$ pending appeal are different and certainly more stringent than those applicable to applications for bail pending trial.4 If it is expected that the threshold for 'exceptional and unusual circumstances' is high in regard to an application for bail pending appeal in a first appellate - court, it must be that much higher on a second appeal. I opine that 30 release pending a second appeal should be the exception rather than the norm.

It is a fact on record that the presumption of innocence of the applicants has already been rebutted by the conviction of two lower courts.

&lt;sup>3 Supreme Court Criminal Reference No.12 of 2020.

&lt;sup>4 Per Sheridan J in Girdhar Dhanji Masrani vs. R [1960] 1 E. A 320.

- From the foregoing discussion, the general principles for grant of $\mathsf{S}$ bail laid out in **Arvind Patel vs. Uganda5** and relied upon by the applicants' counsel are no longer applicable at this stage. The applicants in the instant case must therefore prove exceptional and unusual circumstances to warrant their release. - I opined in the **Bamutura case (supra)** that in applications regarding $10$ bail pending appeal, the court must - above everything else - be guided by two important factors:

(i) the gravity of the offence; and

(ii) the likelihood of success of the appeal.

Counsel for the applicants submitted that the fact that the offence 15 did not involve personal violence should be considered as a factor favourable for their release.

It is my considered view, the gravity of the offence must not and cannot be exclusively defined in terms of whether it involved violence or not. By its very nature, the offences of abuse of office, causing financial loss, false claims of officials cannot by the stretch of any one's mind involve violence. The distinction sought to be drawn between violent and non-violent crimes is over emphasized. I reiterate Trevelyan J's words in **Somo v Republic6** that:

- A man who has been convicted of committing a serious $25$ financial crime is [not] deserving of more favoured treatment than an ordinarily inoffensive man, who has been convicted because, having had a mite too much drink, he knocked someone's tooth out. - In matters of causing financial loss, making false claims to a 30 government entity such as the Uganda Revenue Authority (URA), regard should be made to the extent of loss caused to the tax payer

&lt;sup>5 SCCA No.1 of 2003.

&lt;sup>6 [1972] E. A. 476 – 481.

and the potential implication for the country's development rather $\mathsf{S}$ than asserting that the case is of a non-violent nature.

Counsel for the applicant also argued that there is a possibility of substantial delay in disposing of the appeal since it had recently been lodged in this Court's registry. The respondent's counsel on the other hand stated that the applicants' submission was speculative and that the applicants did not support the assertion with cogent evidence. The respondent's counsel also argued that 'delay' should be assessed in light of whether there was a risk that the sentences or a great portion of them would be served by the applicants before their appeal is heard.

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I note that the applicants were each sentenced to 5 years imprisonment on the count for abuse of office, 10 vears imprisonment for causing financial loss and 2 years imprisonment on the count of false claims. There is no strong basis to support the averment that the sentences will have expired by the time the appeal is heard.

In considering the possibility of success of the intended appeal, this Court is not clothed with the power to delve deeply into the merits of the appeal. At this particular point, it is sufficient for the Court to ask itself whether the appeal is *prima facie* arguable.

The applicants in the present matter attached to their application both the Notice of Appeal and a Memorandum of Appeal. They also annexed the judgment of the Court of Appeal. However, the record of proceedings was not attached. As I held previously in the **Bamutura**

**case (supra)**, a missing court record certainly disadvantages an 30 applicant since the prospects of the appeal succeeding cannot exhaustively be evaluated. Similarly, in the Nakiwuge Racheal **reference case (supra)**, the Court held that without a Record of

Appeal, Court cannot determine possibility of success of the intended $\mathsf{S}$ appeal.

In absence of the Record of Appeal, recourse is made to the grounds of appeal appearing in the Memorandum of Appeal. The essence of grounds in the applicants' Memorandum of Appeal relate to matters of re-evaluation of evidence leading to erroneous conclusions that the offences with which the applicants were convicted of were proved by the Prosecution to the requisite standard.

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Without the record of proceedings, I am unable to determine whether on the face of it the Court of Appeal failed in its duty of re-

evaluating the evidence of various Prosecution Witnesses given 15 during the trial.

In regard to the sureties, I have perused the particulars of the said individuals and I find each of these persons a substantial surety. They were all present in Court during the hearing of the application.

They are same persons who stood surety for the applicants in both 20 the High Court and the Court of Appeal save surety No.1 for the 2nd applicant. I take it that the individuals appreciate their legal duties as sureties in an application for bail. The relationship which they have with the applicants respectively also indicates that they have influence over him and are capable of ensuring that they each abide $25$ with the bail conditions.

It is also on record that the applicants duly complied with the terms of bail set by the High Court pending trial and by the Court of Appeal pending the appeal. This negates the respondent's

submission that the applicants are a flight risk and may abscond $\mathsf{S}$ from the Courts jurisdiction if granted bail.

Be that as it may, in consideration of all the circumstances of this case, I find that the applicants have not proved existence of unusual and exceptional circumstances to warrant their release.

Arising from the above, the applicants' prayer for grant of bail 10 pending appeal is disallowed.

This being a Criminal Appeal, I make no order as to costs.

I so order.

Dated at Kampala this.................................... 15

L'usatenue.

PROF. LILLIAN TIBATEMWA-EKIRIKUBINZA **JUSTICE OF THE SUPREME COURT.**

Delivered by Elle Ryenstra 27 (1/2022) Santfi