Orient Bank told to pay sh200m
THE Supreme Court has ordered Orient Bank and Mars Trading Company to jointly compensate a Kampala lawyer with sh200m as damages for wrongful eviction.
By Hillary Nsambu
THE Supreme Court has ordered Orient Bank and Mars Trading Company to jointly compensate a Kampala lawyer with sh200m as damages for wrongful eviction.
The court also ordered the Registrar of Titles to cancel the registration of a mortgage of Frederick Zaabwe’s property, which Mars made to the bank.
In 1996, Zaabwe failed to pay sh1m to the law council. His friend Livingstone Ssewannyana, a shareholder and director in Mars, agreed to assist him settle the debt.
Zaabwe surrendered his land title to Mars. The company mortgaged the land but Ssewannyana’s cheque to the law council bounced.
When Mars failed to repay a loan it borrowed from Orient, the bank sold the property at sh35m in 1998. Zaabwe and his family were evicted. His law firm, which was also housed in the same house, had to close. He then sued Mars and the bank.
The property that has been in dispute for eight years, is in Kagugube Zone, Makerere Hill in Kampala.
The court ruled that the property that had been sold to Ali Hassan, should be handed back to Zaabwe.
Zaabwe appealed to the Supreme Court after the Court of Appeal had thrown out his appeal on lack of merit.
Zaabwe sued Orient Bank, Mars and four other people, including bank officials and court bailiffs, challenging the mortgage of his property, its sale and his eviction. The High Court dismissed the case.
Zaabwe argued that Mars had no power to mortgage his property and that it was illegal for Orient Bank to sell it off.
The Supreme Court declared that Mars illegally mortgaged the land to Orient Bank and the bank wrongfully sold and transferred the land to Hassan.
Justice Bart Katureebe wrote the lead judgment. The other members of the panel unanimously concurred with him. They were John Wilson Tsekooko, Alfred Karokora, Joseph Mulenga and George Kanyeihamba.
“This is a case where the appellant should receive enhanced compensatory damages not only for the unwarranted wrongful deprivation of his property, but also because of the conduct and apparent arrogance of the respondents,†Katureebe said.
“The law does not permit a guarantee of power of attorney to deprive personal benefits directly from its exercise or the discharge of liabilities whether personal or corporate when they are not connected with the interests of business of the guarantor, unless it expressly provides so.â€
The judge said there was evidence that the directors of Mars indulged in deception and fraud, while the bank knew about it. He ruled that in case the property was sold to a bona fide purchaser before the judgment, the bank and the company shall pay Zaabwe the market value of his property.
The court further ordered the bank and Mars to pay Zaabwe the costs of the suit in all the three courts.
THE Supreme Court has ordered Orient Bank and Mars Trading Company to jointly compensate a Kampala lawyer with sh200m as damages for wrongful eviction.
The court also ordered the Registrar of Titles to cancel the registration of a mortgage of Frederick Zaabwe’s property, which Mars made to the bank.
In 1996, Zaabwe failed to pay sh1m to the law council. His friend Livingstone Ssewannyana, a shareholder and director in Mars, agreed to assist him settle the debt.
Zaabwe surrendered his land title to Mars. The company mortgaged the land but Ssewannyana’s cheque to the law council bounced.
When Mars failed to repay a loan it borrowed from Orient, the bank sold the property at sh35m in 1998. Zaabwe and his family were evicted. His law firm, which was also housed in the same house, had to close. He then sued Mars and the bank.
The property that has been in dispute for eight years, is in Kagugube Zone, Makerere Hill in Kampala.
The court ruled that the property that had been sold to Ali Hassan, should be handed back to Zaabwe.
Zaabwe appealed to the Supreme Court after the Court of Appeal had thrown out his appeal on lack of merit.
Zaabwe sued Orient Bank, Mars and four other people, including bank officials and court bailiffs, challenging the mortgage of his property, its sale and his eviction. The High Court dismissed the case.
Zaabwe argued that Mars had no power to mortgage his property and that it was illegal for Orient Bank to sell it off.
The Supreme Court declared that Mars illegally mortgaged the land to Orient Bank and the bank wrongfully sold and transferred the land to Hassan.
Justice Bart Katureebe wrote the lead judgment. The other members of the panel unanimously concurred with him. They were John Wilson Tsekooko, Alfred Karokora, Joseph Mulenga and George Kanyeihamba.
“This is a case where the appellant should receive enhanced compensatory damages not only for the unwarranted wrongful deprivation of his property, but also because of the conduct and apparent arrogance of the respondents,†Katureebe said.
“The law does not permit a guarantee of power of attorney to deprive personal benefits directly from its exercise or the discharge of liabilities whether personal or corporate when they are not connected with the interests of business of the guarantor, unless it expressly provides so.â€
The judge said there was evidence that the directors of Mars indulged in deception and fraud, while the bank knew about it. He ruled that in case the property was sold to a bona fide purchaser before the judgment, the bank and the company shall pay Zaabwe the market value of his property.
The court further ordered the bank and Mars to pay Zaabwe the costs of the suit in all the three courts.