Seruwagi v Jaffery Forex Bureau Ltd (Civil Appeal No. 89 of 2009) [2018] UGCA 245 (1 January 2018)

Full Case Text

#### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

#### CIVIL APPEAL NO.89 OF 2OO9

(Arising from the High Couft of Uganda, Commercial Division Civil Suit No. 830 of 2OO3)

10 ABUBAKER SERUWAGI APPELLANT

#### VERSUS

# JAFFERY FOREX BUREAU LTD : : :: : : :: : : : :: :: : ::: : : : : : ::: RESPONDENT

(Appeal from the decision of the High Court of tlganda Commercial Division, before Hon.. Iustice Geoffrey Kiryabwire, dated 27"t February, 2OO8).

#### CORAM: HON. JUSTICE REMMY KASULE, JA HON. JUSTICE ELIZABETH MUSOKE, JA HON. JUSTICE CHEBORTON BARISHAKT, JA 15

#### JUDGMENT OF THE COURT

# 20 Introduction

This is an appeal against the Judgment of the High Court (Hon. Justice Geoffrey Kiryabwire), dated 21't February, 2008, where the appellant's suit for recovery of UGX 10,000,000/- from the respondent was dismissed with costs to the respondent.

#### 25 Background

The facts as found and accepted by the trial Court are as follows:

The appellant's case was that on 10th December, 2002, he deposited a sum of UGX 11,111,000/= with the respondent and obtained a receipt for the

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- 5 said deposit. The respondent held "deposit accounts" for various clients who routinely deposited money with the bureau with the view that the said money accumulates to an amount which should then allow them to purchase foreign currency to execute their business. In this case, the appellant had intended that the deposit would be used to purchase forex to be transmitted to Kenya to buy goods. It was the appellant's case that not all the money was sent to Kenya by the respondent as he had instructed. Upon inquiring from the respondent about the shortfall, the appellant was informed that on 10th December, 2002, he had deposited only UGX 1,111,000/= and not 11,111,000/=. 10 - 15 The respondent denied having received UGX 11,111,000/= from the appellant on the said date.

The appellant instituted a suit in the Commercial Division of the High Court against the respondent claimlng for UGX 10,000,000/=, being the difference in the payment, general damages, interest and costs of the suit.

- 20 The following issues were framed for determination by the trial Court: - 1. Whether the plaintiff deposited UGX 11,111,000/= or UGX 1,111,000/- on 10th December, 2002, - 2. What remedies are available to the parties.

25 The learned trial Judge made a finding that on 10th December, 2002, the appellant deposited UGX 1,111,000/= and not UGX 11,111,000/=. The suit was accordingly dismissed with costs to the respondent.

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- 5 The appellant, being dissatisfied with the decision of the trial Court appealed to this Court on the following grounds: - 1. The Learned trial Judge erred in law and fact when he found without any evidence that the appellant deposited a sum of UGX 1,100,000/= and not 11,100,000/=; - 2. The Learned trial Judge erred in law and fact when he failed to subject the receipt to a proper scrutiny before coming to a finding that the extra figure one (1) reflected in the receipt was an additive whilst the sum recorded in words "eleven million"; - 3. The Learned trial Judge erred in law and fact when he relied/believed the uncorroborated testimony of DW1 who never wrote the receipt, made the entries in the cashbook, ledger and computer; - 4. The Learned trial Judge erred in law and fact in holding that the extra figure one (1) as reflected in the receipt cannot be justified having not found that the plaintiff forged the receipt in respect of the impugned transaction; 20 - 5. The Learned trial Judge erred in law and fact when he ignored the margin of error in maklng cashbook, ledger and computer entries whilst the absence of the appellant who could ensure accuracy of the entries after the money had been received;

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5 6. The Learned trial Judge erred in law and fact when he failed to find that the respondent had control over the cash entries made in the cashbook, ledger and finally in the computer after issuing a receipt to the appellant/plaintiff.

# Representation

- At the hearing of the appeal, the appellant was represented by Mr. Geoffrey Kandeebe Ntambirweki (Counsel for the appellant) and the respondent was represented by Mr. Alvin Jabo (Counsel for the respondent). Counsel for either side adopted their conferencing notes and made highlights of the same at the hearing, 10 - Counsel for the appellant reduced the grounds of appeal into three issues indicated below: 15 - 1. How much money did the appellant deposit with the respondent, - 2. Whether the Learned trial Judge properly evaluated the evidence on record, - 3. What are the remedies available to the parties. 20

Counsel for the appellant argued issues 1 and 2 together and concluded with issue 3. We shall address the issues in the same order.

# Appellant's submissions

# fssues 1 and 2:

Counsel for the appellant submitted that had the learned trial Judge properly evaluated the evidence on record particularly Exhibit p34, he would have found the appellant's evidence more credible. 25

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- 5 Counsel made reference to the appellant's evidence that the signature on the receipt in dispute (Exhibit P34) had resemblance with the signatures on exhibit P20. He contended that an analysis of the above documents shows that Exhibit P20 and Exhibit P34 would show similar handwriting and signatures. Further, that the learned trial Judge erred in finding that the appellant deposited UGX 1,111,000/= and not UGX 11,111,000/= and that the extra figure one (1) as reflected in Exhibit P34 could not be justified. It was Counsel's argument that no extra figure was added as the amount was written both in words and figures. 10 - Counsel further submitted that the appellant had proved that the signature appearing on the receipt (Exhibit P34) belonged to the respondent's cashier, whom the appellant personally knew very well as he (appellant) had transacted with the respondent for over four years. Counsel relied on section 6 of the Evidence Act and submitted that it was then upon the respondent to adduce evidence indicating that the signature was forged. 15 - Counsel further submitted that the Respondent, in its Written Statement of Defence denied any knowledge of the appellant. However, that at trial, the Respondent's Managing Director conflrmed that he had known the appellant as the respondent's customer for almost four years. In counsel's view, such a witness could not be considered to be credible. 20 - Counsel made reference to the evidence of DW1 that the receipt in issue was not issued by the respondent, was forged and that the signature appearing thereon did not belong to his staff. Further, that the appellant was never issued with a receipt on 1Oth December, 2002 because he was in 25

5 a hurry. Counsel submitted that the above evidence was hearsay since DW1 testified that the information was given to him by his staff. Counsel contended that Namujju Justine who was the Staff alleged to having issued the receipt did not testify in Court and no reason was advanced for her failure to testify in person. It was counsel's argument that the said Namujju issued the receipt but the respondent avoided to present her to Court for cross examination. 10

It was Counsel's further submission that the burden of proof regarding the issue as to the alleged forgery of the receipt (Exhibit P34) was upon the respondent. Counsel indicated that there was evidence to prove that the disputed receipt had a signature and handwriting that were similar to those in Exhibit P20. Counsel relied on section 103 of the Evidence Act for the above submission.

Counsel for the appellant further submitted that the learned trial Judge erred when he ignored the margin of error in making the cashbook, ledger and computer entries whilst in the absence of the appellant who could ensure accuracy in the entries after the money had been received. Further, that the respondent had control of the cashbook, ledger and computer and it could adjust any figure to suit its purposes. He indicated that the appellant was given a receipt which was the only document given to him to evidence his deposit. Counsel further pointed out that the respondent was in possession of the receipt book/carbon copies but could not produce the same. 20 25

Counsel prayed for issues 1 and 2 of the appeal to succeed.

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#### **Respondent's submissions** $\mathsf{S}$

# Issues 1 and 2:

On his part, counsel for the respondent submitted that as pointed out by the learned trial Judge, all the other deposits (Exhibit P20) could be traced through the respondent's accounting documents namely the cashbook, ledger and computer printout save for the entry of 10th December 2002, which is the transaction in dispute.

Counsel further submitted that the respondent's Managing Director (DW1) denied ever issuing the receipt (EXH P34). Further that his evidence was that the cashier who allegedly signed the receipt in question, Justin Namujju when charged with theft before the Magistrates Court at Buganda Road was acquitted because she successfully challenged the authenticity of the receipt.

It was counsel's further contention that when the aspect of forgery was raised by the respondent at trial, the appellant ought to have requested Court to subject the document to scrutiny by a handwriting expert. 20 Therefore, that in light of the evidence of the outcome of the criminal case acquitting the cashier of any wrong doing, the appellant had conceded to the fact that the receipt was forged.

It was counsel's further submission that the learned trial Judge rightly UGX $1,111,000/=$ and not that the sum deposited was found 25 11,111,000/=. Counsel indicated that the learned trial Judge observed the demeanor of the appellant and the defence witnesses as well as analyzing the evidence on record before arriving at his decision. Further, that the

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5 learned trial Judge made a finding that DW1 was more believable and that the appellant was being dishonest.

Counsel further submitted that any asseftion that the learned trial Judge relied on hearsay and uncorroborated evidence as far as the authenticity of receipts, cashbook entries and computer entries was concerned, was absurd considering that a pafi was at libefi to present witnesses to substantiate any claims. In the present case, that DW1, as the Managing Director of the Respondent was competent as facts were within his knowledge.

Counsel for the respondent made reference to counsel for the appellant's contention that the learned trial Judge erred in ignoring the margin of error in making cashbooks, ledger and computer entries in the absence of the appellant to ensure accuracy of the entries after money had been received. Counsel submitted that the appellant was never an employee or authorized personnel of the respondent and could not be granted unauthorized or unlimited access to the respondent's business and accounting documents. 15 20

Counsel further submitted that the respondent's Cashier could not be said to have made a mistake which was not detected by other departments, This was considering that the respondent's books of account had to balance at the end of the day, taking into account the total cash collected on that day. He fufther contended that the respondent had exhibited cash entry records in Court and there was no anomaly detected. In Counsel's view, the respondent could not issue a receipt and then input a different 25

figure in its accounting documents or systems as that would eventually give it a wrong impression of its business.

Basing on the appeal, Counsel submitted that all the grounds of appeal ought to fail.

#### Issue No. 3

Basing on the submissions above, counsel for the respondent submitted that all the grounds of appeal ought to fail, and costs in this court and the lower court be granted to the respondent. 10

### Resolution of the issues

We have considered the submissions of counsel on either side and carefully perused the court record and the Judgment of the trial Coutt. We are alive to the duty of the 1't appellate court being to re-appraise the evidence adduced at trial and to draw inferences therefrom, bearing in mind that it did not have the oppoftunity to observe the demeanor of witnesses at the trial. (See Banco Espanol Versus Bank of Uganda, Supreme Court Civil Appeal No.8 of 7998). 15 20

It is not in dispute that the appellant and the respondent had a business relationship where the appellant would routinely deposit money with the respondent. The aim of making the deposits was that the money would accumulate to a given amount, which would then be exchanged into foreign currency for the appellant to conduct his business.

The appellant's case at trial was that he had deposited a total sum of UGX 66,741,0001- in installments to be exchanged into US\$ which would in

- 5 turn be transferred by the respondent to the appellant's supplier of goods based in Nairobi. However, that when the appellant cross-checked with his supplier in Nairobi, he discovered that the money transferred by the respondent was less by UGX 10,000,000/=. The appellant testified that upon approaching the respondent, it was alleged that on 10th December, 2002, the appellant had only deposited UGX 1,111,000/= and not UGX 11,111,000/=. The appellant relied on a receipt (Exhibit P34) that was allegedly issued to him by the respondent's cashier, a one Justine Namujju, upon making the payment of UGX 11,111,000/=. 10 - 15 On their part, the respondent's case was that as per its records, the appellant deposited UGX 1,111,000/= on the said date, and that the receipt relied upon by the appellant (Exhiblt P34) was a forgery.

In reaching his judgment, the trial Judge made reference to Hiraa Traders (U) Ltd Versus Lt Col Steven Mugerwa, High Court Civit Suit llo. 588 of 2OO5 (Un reported), for the preposition that a receipt is prima facie evidence of payment. However, that to constitute a receipt, money must have been given by one person and received by another. We accept the above view by the trial Court. The learned trial Judge then made a finding that the respondent's version of the story was more believable. He stated as follows: 20

"Earlier in my judgment f posed the question as to whose version of the evidence was more believable; the plaintiff's or the defendantb? I clearly find the story of the defendant to be more believable as

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5 demonstrated by its systems of checks and balances. Such a unique business of deposits required such checks and balances to be in place and the defendant had them. Only the receipt of the 7fr December, 2OO2 does not make sense. I also find the evidence given by Mr. Manji (DWI) emphatic and clear as to the course of dealings between the defendant and the plaintiff",

From our analysis, the learned trial Judge essentially based his decision on the fact that the respondent had demonstrated that it had an accounting system for monitoring deposits by its customers and also relied on the credibility test in reaching his decision.

From the evidence on record, the accounting system put in place by the respondent as demonstrated by DW1 was that money would be recorded in a cash book, the entries in the cashbook would be posted in the ledger and then the information would be fed in a computer. However, that sometimes a receipt would be issued to a customer while at other times no receipt would be issued. In our view, this in itself showed a flaw in the respondent's accounting system. 15 20

Further, we accept the submission of counsel for the appellant that the appellant did not have control or power to monitor what the respondent,s agents would reflect in the respondent's other accounting documents after the appellant had been issued with a receipt. The recelpt issued to the appellant was the only proof that the appellant would be given upon making any deposlt. In our view, the most important document that should have been subjected to scrutiny at trial was the receipt in issue (Exhibit P34).

5 According to DW1, the receipt in issue (Exhibit 34) was not authentic and was not signed by the cashier as had been alleged by the appellant. DW1 introduced an aspect of forgery. He referred to a one Justine Namujju Who was at the forefront of the transactions and who was allegedly acquitted by Court after making a finding that the receipt in issue was not authentic, DW1 who testified that he was a businessman at the respondent company stated that the appellant was never issued with a receipt by Justine because the appellant was in a hurry and that the signature appearing on Exhibit P34 did not belong to Justine. There was no foundation as to how DW1 would tell whether Exhibit P34 allegedly made by Justine was a forgery or not. Justine was not called to specifically substantiate on the allegations of forgery. 10 15

Section 58 of the Evidence Act, Cap 6, provides that oral evidence shall be direct. In the present case, Justine would have been in better 20 position to testify and deny the signature attributed to her. she would have been the material witness who was key in settling the issue of forgery being a serlous allegation under the law. There was no evidence led that the said lustine was not readily available. Therefore, a negative inference can be drawn against the respondent that omitting to call Justine was 2s deliberate to deny Court the truth (See J. K Patel Versus Spear Motorc Ltd Supreme Court Civil Appeal No. 4 of 7997).

It is trite law that the burden of proof lies on a person who wishes Court to believe his/ her assertion. In the present case, the burden of proof shifted

5 to the respondent at the point when it alleged forgery which it ought to have proved beyond a mere balance of probability.

It was also questionable why the respondent chose to keep its receipt book away from Court. The respondent's records regarding receipt number and carbon copies would have been relevant in determining this matter.

Further, there was no proof that Justine was acquitted by Court of the charges of theft as was alleged by DWL 10

### Issue No. 3: Remedies

In our view, taking all the above into consideration, the appellant was more credible and thus proved his case on a balance of probabilities as required under the law that he had deposited UGX 11,111,000/=. 15

In the result, this appeal is allowed. The judgment of the lower court dismissing High Court Civil Suit No. 830 of 2003 (Commercial Division) with costs is set aside. Instead this Couft enters judgment for the plaintiff, now appellant against the defendant, now respondent, in the sum of Shs. 10,000,000/= with interest thereon at the court rate from 10th December 2002, when the deposit was made to the respondent till payment in full. No submissions were made by the appellant on issue of general damages and none are awarded. The appellant is awarded the costs of this appeal and those in the court below.

we so order. :. t\

Dated at Kampala this Day of 2018

Hon. Justice Remmy Kasul

# JUSTICE OF APPEAL

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Hon. Justice Elizabeth Musoke,

# JUSTICE OF APPEAL

Hon. lustice Cheborion Barishaki, JUSTICE OF APPEAL 20