Registered Trustees of Kampala Archdiocese v Semyalo Michael (Civil Appeal No. 12 of 2006) [2008] UGCA 27 (1 January 2008)

Full Case Text

## THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA

#### **AT KAMPALA**

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$15$

CORAM Hon Justice G. M Okello, JA Hon Justice A. E. N Mpagi-Bahigeine, JA Hon Justice S. G. Engwau, JA

#### CIVIL APPEAL NO. 12 OF 2006.

#### BETWEEN

#### THE REGISTERED TRUSTEES 20 OF KAMPALA ARCHDIOCESE

**:::::::::::::: APPELLANT** $\mid \cdots \cdots$

#### AND

25 SEMYALO MICHAEL :::::::::: :::::::::::::::::::: RESPONDENT

> **Appeal from the Commercial Division of the High** Court (Ogoola, PJ) at Kampala dated 26th May 2006 in HCCs N0. 579 of 2002.

#### JUDGMENT OF G. M OKELLO, JA

This appeal arose from the judgment and orders of the Commercial Division of the High Court (Ogoola P. J) at Kampala dated 26th May 2006 in High Court Civil Suit (HCCs) N0. 579 of 2002.

The facts that gave rise to this appeal are briefly that sometime in the 40 1950s the late Archbishop Kiwanuka (RIP) of the Catholic Church in Uganda, conceived the idea of establishing a Micro Finance Institution as a church based project. The purpose was to alleviate poverty especially

$\mathbf{1}$

among the rural poor. The clergy and some lay apostolates developed the idea over the years. Eventually a private Limited Liability Company known as Centenary Rural Development Trust Limited was incorporated on 6th April 1983.

Among the major objectives of the trust was to operate as a Credit lnstitution through its branches all over Uganda. lt was principally to offer credit facilities to the rural poor. t0

The trust used the existing Catholic dioceses as its shareholders. Many Christians contributed monies to enable the dioceses to purchase shares allotted to them in the trust. The respondent was among the hundreds of parishioners who contributed to some of the shares purchased by the appellant in the trust. The respondent also made further contributions in the names of his then three infant daughters namely, Namayanja Julian, Nanyondo lmmaculate and Namyalo Stella. t5 l0

The model arrangement was copied from South America where the practice has existed for over 150 years. There, the practice is called " Unit Trust lnvestment". Under the arrangement, the understanding is that a contributor who wishes to withdraw would be free to do so at any time. There is a Formula known as " Gordon's Growth Model Formula" that is applied to calculate the amount of the investment of the withdrawing contributor plus the accruing interest thereon.

At the time when this case started at the High Court, there were about 600,000 such contributors. A few years later, the Trust Company received a license to operate as a Bank. Consequently, it changed its name to "Centenary Rural Development Bank Ltd." (The Bank) -10

)

The respondent and twelve others that included his three infant daughters later sued the bank claiming among other things:-

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## 1) That their names had been wrongfully omitted from the Irust's Bank's register of members.

# 2) That at the time they made contrihutions they had falsely been made to believe that they were paying for ordinary shares in the company whereas not.

The respondent and other plaintiffs' claims were grounded in torts of misrepresentation and fraud.

They sought various reliefs arising from these claims.

Following scheduling conference inter-partes before the hearing of the suit, the plaintiffs prayed court to join the appellant and Masaka diocese in the suit as defendants. The court allowed that prayer and the plaint was amended. The appellant and Masaka diocese were joined in the suit as defendants.

Later, twelve of the plaintiffs including the respondent's three infant daughters who had sued through him as their next friend, settled their claims with the appellant and l/lasaka diocese out of Court. ln the compromise, the respondent and Masaka diocese agreed, firstly that the respondent's said three infant daughters and other plaintiffs disinvest the contributions they individually made towards their respective diocese's subscription to the purchase of shares in the bank. Secondly that the l0

t diocese was to pay those plaintiffs costs of the suit. A Consent Decree to that effect was filed. The respondent however, decided to proceed with the suit alone as plaintiff.

l0 Following the compromise, counsel for the defendants raised a preliminary objection to the respondent's further pursuit of the suit. The trial judge overruled the objection.

l5 Consequently, the plaint was further amended, this time, dropping the names of the twelve plaintiffs and the defendant, llasaka diocese. The suit proceeded with the respondent as the sole plaintiff against two defendants namely, Centenary Rural Development Bank as the first defendant and the appellant as the second defendant. At the end of the hearing, the court found:-

- l0 (1) That the respondent was not a shareholder and his suit against the bank was dismissed. - (2)That the appellant was responsible for a series of " non drsclosures" and judgment was given for the respondent against the appellant.

Orders were made that the appellant pays:-

- (a) General and punitive damages, - (b) Accrued dividends.

- (d) interest thereon and - (e) Costs of the suit.

It is against this decision that overruled the appellant's preliminary objections and made the above findings and orders that the appellant has appealed to this court on the following grounds:-

- (1) The learned trial judge erred in law and in fact when he dismissed the appellant's prel iminary objection. - (2) The learned trial judge erred in law and in fact when he proceeded to hear the suit and grant relief on the claims in respect of which was time barred. - (3) The learned trial judge erred in law and in fact when he failed to take into account evidence adduced by the appellant in deciding the suit. - (4) The trial judge misdirected himself when applying Gordon's Growth Model Formula to the facts of this case thereby arriving at erroneous quantum ?s, the disinvestment sum due to the respondent. - (5) The learned trial judge's award of general and punitive damages is neither justified by the pleadings nor by the evidence adduced by the respondent at the trial. - (6) The learned trial judge erred in law and in fact when he awarded interest to the respondent.

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5 Following the inter-partes scheduling conference held before the hearing of the appeal, the following issues arising from the above grounds were framed for determination of the court:-

## (1) Whether the respondent was bound by the compromise to the suit.

- (2) Whether the appellant was laibale to the respondent on the grounds proposed by the trial judge or at all. - (3) Whether the trial judge properly evaluated the evidence and

# (4) Whether the awards made by the trial judge were justified.

At the hearing, Mr. Peter Kabatsi of M/s Kampala Associated Advocates and Mr. Stephen lVlubiru of Ms Kawanga & Kasule Advocates jointly represented the appellant while Justin Semuyaba of tr4/s Semuyaba, lga & Co. Advocates appeared for the respondent.

Parties filed conferencing notes (summary of their legal arguments). At the hearing, counsel for the respondent adopted his conferencing notes and made only highlights of the same.

ln his conferencing notes Nilr, Semuyaba raised what appears to be a preliminary objection to counsel for the appellant's conferencing notes . I propose to tackle this matter first before I deal with the framed issues. 30

5 It/r Semuyaba contended that what appears in counsel for the appellant's conferencing notes are issues not at all raised in the memorandum of appeal. He argued that under rule 101 of the Rules of this Court, no counsel, except with leave of the Court, shall argue any point which is not specified in the memorandum of appeal. He submitted, therefore, that the appellant's conferencing notes are irreverent to this appeal. l0

ln his written response, Mr Mubiru denied that the framed issues are not reflected in the memorandum of appeal. He submitted that they arose from the grounds contained in the memorandum of appeal. He explained that issue N0. 1 arose from ground 1 and issues N0. 2 and 3 arose from grounds 2,3 and part of ground 4. lssue N0. 4 on the other hand arose from grounds 5, 6 and part of ground N0. 4.

He pointed out that the resort to issues instead of grounds was intended to bring into focus the main points in contention raised by the grounds of appeal. lt is a practice directed by the Court of Appeal. lt neither substitutes grounds nor is it intended to be so. No new grounds or matters are introduced by adopting this procedure. None of the rules of the Court of appeal is thereby violated. l0

I agree with Mr. Mubiru thal inter-partes scheduling conferencing before the hearing of a civil appeal in this Court is a procedural practice. lt is intended to expedite disposal of appeals by sorting out points of agreements and disagreements in order to identify real issues of disputes in the appeal. Filing in advance of summary of counsel's legal arguments is a modern trend these days intended to give the courts focused preparation of the case before the hearing and thereby expedite disposal of the cases.

The issues framed at the close of the scheduling conference are always those arising from the grounds of Appeal. No rule of this court is thereby violated. l, find therefore, that this objection is grossly misconceived because this practice is well known to the Uganda Law society. Uganda Law society, to which counsel for the appellant is a member, is a member of the Court of Appeal's user's Committee. lt is from this committee that this practice was devised to expedite disposal of accumulated backlog of civil appeals. l0

- l-s I now turn to the issues starting with issue N0. 1:- Whether the respondent was bound bv the compromise of the suit. This issue in fact when he dismissed the a pellant's preliminarv obiection. reflects ground N0. 1 which is- the learned trial iudqe erred in law and - l0 lV'lr. Peter Kabatsi who argued this issue for the appellant, contended that the respondent was bound by the compromise. Learned counsel argued the issue on two fronts, firstly that the respondent was bound by his instructions to his lawyers to settle the matter out of court. - 25 Secondly that it was inequitable for the respondent to be allowed to approbate and reprobate the settlement reached by the lawyers and endorsed by the court as a consent judgment.

On the first front above, learned counsel pointed out that the respondent and all the other plaintiffs including his three infant daughters had instructed M/s Niwaqaba and Mwebesa Advo ..]0 prosecuting the suit. cates to represent them in

tt 5 That firm negotiated on behalf of the plaintiffs a settlement of the suit out of court. A compromise was reached. By the time the compromise was filed and endorsed by court on 14-10-2003 neither the respondent nor his second counsel, M/s Semuvaba, lqa & CO. Advocates had withdrawn instructions from M/s Niwagaba and Mwebesa Advocates nor filed notice

of change of advocates. l()

ln those circumstances, lVlr. Kabatsi argued, lVl/s Niwagaba and ltlwebesa advocates, for all intents and purposes, continued to act for respondent as well until when the notice of change of Advocates was filed. Learned counsel cited Re Hobbler (1844) 50 ER 40 to show that a client was absolutely and conclusively bound by what his/her duly instructed counsel, on his or her behalf, consents to in court.

He pointed out however, that if the client has reason to think that counsel

is taking a course that will prejudice his interests, he may withdraw his brief, so as to put an end to his authority to represent the client before court. 20

Learned counsel pointed out further that a consent given by counsel with the sanction of his client may be withdrawn if it is shown by evidence that counsel had misapprehended and mistaken his client's instruction, for in such a situation, there was in fact no authority for his consent. Learned counselcited Halt VS Jesse 1876) 3 ChD 177 as authority for the above proposition. 25

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He pointed out that withdrawal of instructions from counsel after negotiations but before the Decree was finally signed could only be possible on the basis of proved mistake or mis-apprehension. He cited

- s Taylor VS Coqwell (1965 ) SJ 49 where it was held that counsel's apparent authority to compromise cannot be limited by instructions, not even the withdrawal of instructions unknown to the other party. - He submitted that in the instant case, the respondent's claim that he l0 withdrew his instructions from M/s Niwaqaba & Mwebesa Advocates was firstly not brought to the appellant's attention before the conclusion of the compromise negotiations. Secondly, that alleged withdrawal was based on mistake or misapprehension which the respondent did not adduce evidence to prove.

He concluded that that withdrawal did not discharge the respondent from the compromise.

He urged us to adopt the principle that so long as counsel is acting for a

20 party in a case and his instructions have not been terminated, he has full control over the conduct of the case and has apparent authority to compromise all matters connected with the action he considers best in the interest of his client. He relied on Re Newen (1903) 1 Ch . D 817 Buladina Nankva & another Vs Bulasio Konde (1979) HCB 239.

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On the second front above, that it was inequitable to allow the respondent to approbate and reprobate the consent judgment, Mr Kabatsi contended that the respondent was bound by the compromise. He submitted that to allow the respondent to continue with the suit when his claim was identical with the claim of his three daughters of minor age, for whom he was next friend and whose claim he compromised for them, would be allowing him to approbate and reprobate the consent judgment. He stated that the respondent's claim was similar in all respects to the claims

of the rest of the plaintiffs and that the consent judgment bound the respondent as well.

He conceded however, that the respondent appeared in the trial court in a dual capacity; on the one hand as a party to the suit in his own right as the first plaintiff, and on the other as a father and next friend of his three minority age daughters who were the tenth, eleventh and twelfth plaintiffs. Learned counsel argued nevertheless, that it was inequitable for the respondent as the next friend to compromise the claim of his minority age daughters and sought not to be bound by the same terms he negotiated on their behalf. He submitted that the position of a next friend involves both legal and moral duties of a particularly heavy kind. He cited Re Tavlor's application 1972 ( Ahler 873 at 870 as his authority for that proposition. l0 l5

Netherlanels Steamship Company Ltd (1921) AC 608. 20 He pointed out that in the instant case, though the respondent bore a legal duty to ensure that the compromise he entered into was in the best interest of the minors, he also had the moral duty as a father and next friend not to appear to be pursuing a remedy better and different from the one he negotiated on behalf of the minors when his claim and the claim of 25 the minors are based on same facts, of similar nature and sought the same reliefs. He could not approbate the consent judgment in his capacity as next friend and again reprobate it as plaintiff. For this proposition counsel relied on Verschures creameries Ltd Vs Hull and

Learned counsel submitted that in the instant case, the respondent could not be seen to say that the consent judgment was valid for his three minor daughters and obtain the benefit under it then turn around to say that the

) consent judgment is invalid for his own purposes in order to enable him pursue a different and better relief when his claim and the claims of his minor daughters are on all fours.

ln response to the first front above, Mr. Semuyaba, learned counsel for the respondent, submitted that the respondent was not bound by the compromise His reason was that as much as M/s Niwaqaba & Mwebasa advocates represented all the thirteen plaintiffs, the respondent opted not to accept the compromise entered into and filed on 14-10-2003 because the respondent had filed a notice of change of Advocates. Therefore, he reasoned, for all intents and purposes the compromise did not include the respondent. He is not bound by it. l0 l5

On the 2nd front above, whether the respondent could be permitted to appobate and reprobate the consent judgment, Mr. Semuyaba stated that he agreed with the trial judge's ruling that the claim of the respondent was different from the claim of his minor daughters for whom he was next friend. Therefore, the compromise he signed on behalf of his children does not bind him as the plaintiff. 20

To determine whether the criticism of the trial judge is or is not justified, it is important to study his ruling to determine how he handled the issue. 25

The record of the proceedings of the trial court shows that the question whether the respondent was bound by the compromise or not was raised and argued before the trial judge as a preliminary point of law. The trial judge made a ruling thereon before he proceeded to hear the respondent's claim. The minute of the Court on 15/01/04 shows that the .t0

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- l ruling of the court was delivered on that day dismissing the preliminary point of law as follows: - O "court: Delivers its ruling (see attached typed copy) dismissrng the preliminary point of law raised by the respondent on alleged violation of the plaintiffs trustee fiduciary duties to his minor children"

However, no copy of that ruling is available. Every effort to trace it did not bear fruit. I am, therefore, unable to determine the reasons, which prompted the trialjudge to dismiss the preliminary point of law.

As this is a first appellate court, I am duty bound to reappraise the evidence on record. I have read the arguments of counsel for the appellant on the preliminary point of law and the response of counsel for the respondents thereto.

The arguments of counsel for the appellant on this point are found from pages 313 to 315 of the record of appeal. The response of counsel for the respondent thereto is found from pages 307 to 312 of the record of appeal.

The arguments of counsel for the appellant on the preliminary point of law before the trial judge are basically the same with the arguments they presented before us on issue N0. 1 as summarized above. There was no equating of a next friend with a trustee and breach of the next friend's fiduciary duty to the minors. All that the appellant raised was:-

- (1) Whether the respondent was not bound by the consent judgment which was negotiated by Niwagaba and Mwebesa Advocates who was acting for all the plaintiffs. - (2) Whether in allowing the respondent to continue with his suit in which his claim was on all fours with the claim of the minors for whom he was next of friend who secured for them a settlement, would not be permitting him to approbate and reprobate the consent judgment. - l5 On (1)above, though Mr. Semuyaba contended that the respondent had opted out of the settlement and that he had filed notice of change of Advocates, the record shows that the Notice of change of Advocates was filed by the respondent on 1511012003. This was a day after the compromise had been filed and endorsed by Court. - l()

ln Re Hobler (1844) 50 ER 40. it was held that a client was absolutely and conclusively bound by what his/her duly instructed counsel, on his /her behalf consented to court.

- zs ln the instant case, the record shows that the compromise was filed and endorsed by court on 14-10-2003 when M/s Niwaqaba and Mwebesa Advocates were still acting for all the thirteen plaintiffs. No Notice of change of Advocates had been filed until 1511012003. The respondent's claim that he had withdrawn instructions from M/s Niwagaba and - ,r0 Mwebesa Advocates and opted out of the compromise is not tenable because there is no evidence that the fact of that withdrawal was brought to the attention of appellant .

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- s lt was held in Ta lors VS Go wel 1965 SJ 49 that withdrawal of instructions not brought to the attention of other party could not discharge the party withdrawing. Therefore, the alleged withdrawal of instructions by the respondent from M/s Niwaqaba and Mwebesa Advocates did not discharge him from the consent judgment. - l()

On (2) above, Mr. Semuyaba contended that the claim of the respondent was different from the claim of the minors when the compromise was reached. The trial judge appears to have accepted that argument.

l5 20 To determine whether the claim of the respondent who was the 1't plaintiff differed from the claim of the minors who were the 10th, 11th, and 12th plaintiffs and for whom the respondent was next friend, it is necessary to look at the amended plaint dated 221712003. This was the plaint that was used to negotiate the settlement. For ease of reference I reproduce here below paragraphs 4 and 5 thereof as follows:-

Paragraph 4 reads.

25 " The plaintiffs' claim against the defendants jointly and severely is for a declaration that the plaintiffs are share holders in the first defendant, an order that their names be entered in the first defendanf's regisfer, an order that the plaintiffs' returns be rectified to reflecUportray the plaintiffs as shareholders, an order for payment of dividends to the plaintiffs, general, exemplary/punitive damages and cosfs of the suit". -10

5 (i) The plaintiffs' severely between 1984 and 1997 subscribed shares in the first defendant (then known as Centenary Rural Development Trust Ltd) and dully paid up for shares subscribed as follows:-

| l't plaintiff - | --34071shares | |-------------------------------------------------|---------------| | ld plaintiff - -------------------129 shares | | | td plaintiff ---101 | shares | | 4th plaintiff | 120 shares | | 51 Sth plaintiff | shares | | -------40 shares 6th plaintiff | | | 5 7th plaintiff | shares | | }th plaintiff | 313 shares | | 9th plaintiff | 100 shares | | 1 th ptaintiff | 55 shares | | 1lth ptaintiff | 55 shares | | 12th plaintiff | 50 shares | | 13th plaintiff | 51 shares | | | |

(ii) At the time of the subscription and the payment of those monies the plaintiffs were led into paying the same by the defendants jointly who convinced them that the monev was to capitalise the first defendant and later make profits. Whereupon receipt as evidence of payment of the shares were issued. Samp/es of the receipts that were issued by the first defendant then known as Centenary Rural Development Trust Ltd) jointly with the 2'd defendant and in the some rnstances with the 3'd defendant are attached hereto as annexture Group D1 .

-10 - (iii) ln breach of the law and the first defendant's Memorandum and Articles of Association, the first defendant has excluded the plaintiffs from participation in the management of its affairs by refusing to invite the plaintiff to its meetings. . Copies of the Memorandum and Articles of Association shall be produced and relied upon at the hearing. - (iv) Further the first defendant has unlawfully refused to enter the plaintiff's names in the Regisfer of the Members and the various returns filed with the Registrar of Companies (Coples of the returns to that effect are hereto annexed and marked " Annexture Group E". - (v) The first defendant has denied the plaintiffs access to fhe Companies Statutory Records kept with it thereby denying the plaintiffs information and full participation in the first defendant. - (vi) ln light of the foregoing, the plaintiffs aver that their rights in the first defendant as share holders have been and continue to be infringed upon and they have suffered loss and damages." 25 - -r0 Paragraph 5: which raised alternative claim reads:-

# " ln the alternative but without prejudice to the foregoing, the plaintiffs claim from the defendants jointly and severely the

5 market value of fhe shares being the money payable by the defendants to the plaintiffs as money had and received together with interest thereon at the commercial rate and shall aver that the defendant's act constitute unjust enrichment and the plaintiffs are entitled to the value of their shares.

#### Particulars

- 0 The defendants received the money from the plaintiffs as being the amount of shares in the first defendant but to date the interest of the plaintiffs has never been entered in the register and the plaintiffs have never received dividends at all taking into account the market value of the shares to date. - l0 (ii) The money was received by the defendants who held it to their use to date. The first defendant has since maDe enormous profits which it has invested in various ventures and projects" - 2s From the above pleading, it is clear to me that no distinction has been disclosed between the claim of the respondent (1"t plaintiff ) and the claim of the 10th, 11th, and 12th plaintiffs who were the minors' for whom the respondent was next friend. The argument that the respondent's claim was for ordinary shares while the minors claim was for preferential shares l0 is not tenable as it is not reflected in the above extract of the amended plaint. This was the plaint upon which the settlement was negotiated and concluded.

5 l0 The respondent as the father and next friend, had both legal and moral duties in relation to his minor daughters for whom he was next friend. Re Taylor's application (19721 2 AER 873 at 879 is authority for this proposition. On that principle, I agree with Mr. Kabatsi that the respondent had a moral duty, as father and next friend not to appear to be seeking for himself a remedy better and different from the one he negotiated for the minors when his claim and the claim of the minors are similar in nature and they sought same reliefs.

l, would therefore, answer issue N0.1 in the affirmative that the respondent was bound by the compromise. l5

## lssue N0. 2 is whether the appellant was liable to the respondent on the grounds proposed by the trialjudge or at all.

- Arguing this issue for the appellant, Mr. lVlubiru Stephen pointed out that the trial judge's findings that the appellant was liable to the respondent was premised on some form of misrepresentation/fraud. Learned counsel was critical of the pleadings. l0 - He contended that the pleadings filed by the respondent did not and could not justify the trial judge's findings because there was no specific pleading covering misrepresentation or fraud. He contended in the alternative that even though court were to find that there were such pleadings, there was no evidence to prove misrepresentation and fraud. t5

Learned counsel pointed out that there are receipts ( see pages 378 to 781 RA) which indicate that the money received was for payment for share contributions. There is also evidence of final receipts (see pages

962 to 964 RA) showing that receipts were for contribution to shares allotted to the respective Dioceses. There is no evidence of false statement about the purpose of these payments except the respondent's words.

- On fraud, tt/r. tMubiru contended that the arrangement was made in good faith to maintain the Company's Status as a private limited Liability but benefiting a multitude of people . The dividends divided to the dioceses as shareholders would be transmitted pro-rata to the contributors without any deduction by the dioceses. See Receipt dated 30-11-2000 from Kampala Archdiocese office of the Treasure showing the sum of shillings 70,500/= dividends was paid to the respondent on his share contribution through lVlengo Kisenyi Parish. He also relied on the evidence of [t4r. Adirian Sibo. l0 l5 - 2r) Mr. Mubiru submitted that there is no evidence of cheating or malafide dealings. He relied on a list which appears between pages 980 and 984 of the RA showing how dividends were paid out through parishes to contributors on their share contributions. - 2s Mr. Semuyaba, learned counsel for respondent, contended that the respondent's pleadings raised the issues of fraud or misrepresentation in paragraphs 4 and 5 thereof. The pleadings complied with the requirement of Order VI Rules 12 and 13 of the Civil Procedure Rules. He pointed out that it is sufficient under these rules to allege fraudulent intention without i0 setting out the particulars thereof.

l He stated that the appellant did not object to the pleadings at the trial, when he should have, under Order VI Rule 17 of the Civil Procedure Rules. The trialjudge's finding was based on these pleadings.

On proof, [Vlr. Semuyaba submitted that there is sufficient evidence on record to prove misrepresentation. He stated that the evidence is contained in the affidavit of the respondent at P. 317 RA. l0

The record of Appeal shows that the trial judge's judgment stated to be dated 9th March 2005 in which he dealt with this issue is not included in the record of appeal. lt is stated to be missing from the original record. I agree. I personally perused the original record of the proceedings but could not also find that judgment. I am, therefore, unable to determine how the learned trial judge dealt with this matter and how he came to find the appellant liable for fraudulent misrepresentation and non-disclosure.

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I re-appraised the evidence on record as a first appellate Court. There is the sworn statement of the respondent which I considered visa-vis that of t\4r. Adrian Sibo and other documentary evidence on record. The impression I have is that there is no sufficient evidence to prove fraudulent misrepresentation and non disclosure. The respondent claimed that at the time of paying the subscription of the shares he was led into paying for the same to capitalize the bank and make profit. I find no misrepresentation in that statement for that was the truth. lt is also supported by the evidence of Mr. Adrian Sibo together with the shares contribution provisional receipts and acknowledgement certificates issued by the appellant and the bank respectively. 25 -.\0

5 According to tvlr Sibo, the purpose of involving the laity in mobilizing resources on behalf of their respective dioceses was to capitalize the bank and to let the laity have stake on the bank through their respective dioceses. The methodology of doing that was by the individual members of the laity contributing towards the purchase of shares allotted to their respective dioceses. l0

A list of contributors to the Diocesan shareholdings was and is still being maintained by the respective Dioceses, Parish by Parish, to facilitate distribution of dividends in proportion to their contributions when declared.

This arrangement was well known to the respondent as indicated in his letter dated 9/8/2000 addressed to the Chairman, Board of Directors of the Bank Ltd. ln that letter the respondent indicated that he was " one of the contributors" to the shares held by Kampala Arch dioceses.

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It was, therefore, hypocrisy for the respondent to later turn around to claim that he was led to believe that he was buying shares in the bank.

On the evidence available, it is not true that the appellant did not disclose the shares of ownership. lt was made clear that the share holders were the dioceses not individual contributors. 25

On dividends, the evidence available shows that the bank made profits in 1997 and declared dividends which the respective Diocese distributed pro-rata to their respective contributors. The respondent himself got the same in the sum of 70,000/=.

lfind no merit in this issue N0. 2.

I would, therefore, answer it in the negative.

o ln view of my findings on issue N0. 2 above, I would also answer issue N0.3 and 4 in the negative.

ln the result, I would allow the appeal with costs. I would set aside the judgment and orders of the lower court and substitute therefor an order dismissing with costs the respondent's suit. The respondent is free to disinvest and be paid any accrued dividends thereon in terms of the compromise.

Dated at Kampala tnis ..... J.:i 'f! .......day of 11) 2008.

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-'I!v{j\--\-t- '--<,

### 25 G. M OKELLO JUSTICE OF APPEAL.

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

#### **CORAM:**

# HON. JUSTICE G. M. OKELLO, JA HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA HON. JUSTICE S. G. ENGWAU, JA

### CIVIL APPEAL NO. 12/2006

THE REGISTERED TRUSTEES OF K'LA ARCHIDIOCESE ::::::: APPELLANT **VERSUS**

SEMYALO MICHEAL :::::::::::::::::::::::::::::::::::: (Appeal from the Judgement/Order of His Lordship Justice James Ogoola dated 25th May 2006)

### JUDGEMENT OF HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA

I have read in draft the judgement of Okello J. A. I entirely agree with it and would have nothing useful to add.

Dated at Kampala on this $\ldots$ day of $\ldots$ day of $\ldots$ 2008.

HON A. E. N. MPAGI-BAHIGEINE **JUSTICE OF APPEAL**

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

### CORAM: HON. JUSTICE G. M OKELLO, JA $\smile$ $\overline{5}$ HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA HON. JUSTICE S. G. ENGWAU, JA

#### CIVIL APPEAL NO. 12 OF 2006

#### **BETWEEN**

THE REGISTERED TRUSTEES OF KAMPALA

**ARCHDIOCESE**

$\verb|!::...::...::...::APPELLANT|$

#### AND

SEMYALO MICHEAL ::::::::::::::::::::::::::::::::::::

(Appeal from the Commercial Division of the High Court at Kampala (Ogoola, PJ) dated 26th 15 May 2006 in HCCS NO. 579 of 2002).

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#### **JUDGMENT OF ENGWAU, JA**

I have read, in draft form, the judgment prepared by Okello, JA. His findings and orders are agreeable to me. I have nothing useful to add.

Dated this $\longrightarrow$ Day of $\longrightarrow$ Def. $2008$ 25

S. G. Engwau **JUSTICE OF APPEAL.**