In the recently decided case of Kiyimba Moses Prince versus Centenary Rural Development Bank (H.C.C.S No. 0830 of 2014), Hon. Justice Thomas Ocaya held that banks owe their customers a duty of care to safeguard deposits whether monetary, documentary or any valuable of its customers and failure to do so can and will attract damages of a general, specific and punitive nature.

The facts are that in 1999, the plaintiff, Kiyimba Moses Prince, took out a loan facility of UGX 1,500,000/= with Centenary Bank where he pledged and deposited his original duplicate Certificate of Title in respect of his land as security.

By 2000, the Plaintiff had cleared the loan and demanded the return of his Certificate of Title that was security which was in the possession of the bank. However, for unknown reasons, the Bank failed, refused or neglected to hand the title back to him. In 2014, the Bank admitted to having lost the title and Mr.Kiyimba then filed this suit praying for return of the Certificate of Title, compensation to the tune of UGX. 180,000,000/= for loss of business, general and punitive damages, interest and costs.

The bank eventually handed over a special certificate of title to the Plaintiff and consequently, his Lordship Ocaya was then left in the position of pronouncing himself on the other remedies sought by the plaintiff in the suit.

Pronouncing himself on the same, he addressed his mind to the definition of damages as defined by the East Africa Court of Appeal in Dharamshi v Karsan [1974] EA 41 where court held that damages are awarded to fulfill the common law remedy of restitutio in integrum which is; the Plaintiff has to be restored as nearly as possible to a position he or she would have been in, had the injury complained about had not occurred.

As to special damages, Special damages and loss of profit must be specifically pleaded and they must also be proved exactly, that is to say, on the balance of probability (Haji Asuman Mutekanga v Equator Growers (U) Limited SCCA No. 7 of 1996) In the instant case, the Court dismissed the payer for compensation made by the Plaintiff because it was not satisfied that he had pleaded or proved sufficiently the loss suffered as result of the Bank’s negligence to warrant any award. What remained relevant were the general damages, punitive damages, interest and costs.

He considered the guidance set forth by McCardie J. stated in Butterworth V. Butterworth & Englefield [1997] EWCA CIV JO 207 where Exemplary damages were seen to mean damages for ‘example’s sake’ and punitive or exemplary in nature. They represent a sum of money of a penal nature in addition to the compensatory damages given for the pecuniary or physical and mental suffering.

In Principles Governing the Award of Damages, Justice Bart Katureebe (Supra) The award of exemplary damages was considered by the House of Lords in the landmark case of Rookes V. Barnard. Lord Devlin stated that in his view 15 there are only three categories of cases in which exemplary damages are awarded, namely:

● where there has been oppressive, arbitrary, or unconstitutional action by the 5 servants of the government;

● where the defendant’s conduct has been calculated by him to make a profit which may well exceed the compensation payable to the plaintiff; or

● where some law for the time being in force authorizes the award of exemplary damages.

In the absence of any specific law, I invoke the powers under the Judicature Act, 20 CAP 6 Section 14(2) C, Section 14(3), Section 14 (4) that collectively grant the High Court the authority to rely upon common law and equity in instances where written law is insufficient. In equity, the Judge noted that Defendant owed the Plaintiff a duty of care and it is heavier for the Defendant given that among their key purposes is to safeguard deposits whether monetary, Documentary or any valuable of its customers and the alternative thought of losing the same is dreadful.

It is irrespective of whether the Defendant replaced the Duplicate certificate of title or not, it is a question of principle.

He entered a punitive damage finding against the Defendant of UGX 10,000,000/= that was done to caution against the loss of the duplicate certificate of title that happened between 1999 and 2000