The Supreme Court has ordered businessman Ben Kavuya and his company, Global Capital Save, to pay Shs222 million in damages to Alice Okiror, the widow of former FUFA treasurer Michael Okiror, following a 16-year dispute over a loan.
A panel of five Supreme Court justices, comprising Percy Night Tuhaise, Monica Mugenyi, Stephen Musoke, Christopher Madrama and Catherine Bamugemereire, reached the decision in a majority ruling that dismissed Kavuya’s appeal.
The dispute dates back to 2008, when Alice and her husband, Michael Okiror, approached Global Capital Save seeking a loan.
The couple obtained Shs53 million and provided land titles as security. One of the securities was a title belonging to their daughter, Aguti Rose, for land in Kireka, while Alice also offered her property in Lukuli, Makindye, as security.
The loan was expected to be cleared within about ten months, between February and December 2008.
According to the evidence considered by the courts, the Okirors made a series of payments to Kavuya’s company, eventually paying a total of about Shs230 million.
When they sought the return of their land titles, however, the company declined, maintaining that the loan had not been fully settled.
The disagreement eventually resulted in a lawsuit filed in 2010 against Kavuya and Global Capital Save.
The Okirors asked the court to declare that the Shs53 million loan, together with the applicable interest, had been fully paid. They also challenged the interest charged on the loan, sought the return of their land titles and demanded reimbursement of what they considered an overpayment of Shs192.5 million, together with damages.
Kavuya disputed the amount borrowed. He maintained that the Okirors had received Shs350 million rather than Shs53 million and that only Shs230 million had been repaid, leaving a balance of Shs120 million.
He also denied receiving Aguti Rose’s land title as security.
The High Court, presided over by Justice Hellen Obura, ruled in favour of the Okirors.
The court found problems with the execution of the mortgage documentation, including the absence of the required company signature and proper witnessing. It also found that there was no evidence of written spousal consent from Michael Okiror before Alice’s family land was used as security.
The High Court further found that Global Capital Save had charged interest at a rate of 12 per cent per month, equivalent to 144 per cent per year.
Justice Obura held that the interest rate was unlawful, harsh and unconscionable and consequently declared the loan fully settled. Kavuya was also ordered to return the title for the Lukuli property.
Kavuya appealed to the Court of Appeal through his lawyers Peter Nkurunziza, Joseph Kyazze and Brian Rubihayo.
His lawyers argued that the mortgage had been properly executed and challenged the decision to hold Kavuya personally liable, contending that he had signed the relevant documents in his capacity as a company director rather than in his personal capacity.
Representing Alice Okiror, lawyer Gilbert Nuwagaba argued that Kavuya’s own evidence raised questions about the validity of the mortgage documents. He also pointed out that the company had failed to satisfactorily prove that the Okirors had borrowed the alleged Shs350 million.
The Court of Appeal upheld the decision against Kavuya, prompting him to take the matter to the Supreme Court.
In its ruling, the Supreme Court upheld the findings against Kavuya on several key issues.
On the question of spousal consent, the justices found that Kavuya’s side had failed to produce evidence showing that the required consent from Michael Okiror had been obtained.
The court noted that the respondents had had an opportunity during the trial to establish that the consent existed but failed to do so.
The Supreme Court also agreed with the lower courts on the interest charged on the loan. The justices referred to the provisions of the Moneylenders Act concerning excessive interest, noting the statutory position regarding interest above 24 per cent per annum and the requirement for a lender to justify such a rate.
The appeal was ultimately dismissed by a majority of four justices to one on the mortgage execution issue. Justice Monica Mugenyi dissented on that question.
Justice Catherine Bamugemereire also dissented in relation to the special damages, taking the view that the special damages should not have been awarded.
The majority decision nevertheless upheld the award of Shs222 million in general and special damages, together with interest, and directed that Alice Okiror’s land title be returned.
The ruling brings to a close a dispute that began in 2008 and passed through the High Court, Court of Appeal and Supreme Court before reaching its final determination.
ENDS.
