IN THE HIGH COURT OF UGANDA
CIVIL SUIT NO 266 OF 2008
BEFORE: HON. LADY JUSTICE ELIZABETH MUSOKE
The plaintiff was a Senior Lecturer at Makerere University until 18/12/2007 when he retired. He sued the defendant for:
b) Shs 40,074,031/= as total outstanding commuted pensionable gratuity under the in-house retirement benefits scheme.
c) Shs 233,745/= monthly pension for 15 years cumulatively in advance with effect from 18/12/2007.
d) Repatriation transport costs to Rukungiri before departure.
e) A declaration that he is entitled to remain in his house till payment of all his benefits.
f) An order of injunction to restrain the defendant from evicting the plaintiff till payment of his benefits.
g) Punitive or exemplary or aggravated and/or general damages.
h) Interest at 35% per annum from due date to full payment on all payments under a-d above, and from judgement till payment in full on payments under (g) above.
i) Costs of the suit.
The plaintiff was represented by Mr. Magellan Kazibwe, while the defendant was represented by Mr. Andrew Kabombo.
After protracted negotiations, the parties agreed to settle the matter out of court. However, the issue of interest was left for court to determine. The parties agreed as follows:
b) The plaintiff was to vacate the suit premises within 30 days from the date of full payment of the above sums, except the monthly pension which will be remitted monthly for the remainder of the 15 years.
c) The defendant shall repatriate the plaintiff to his home district in Rukungiri.
d) The defendant shall pay the plaintiff taxed costs in the main suit
On the issue of interest, Mr. Kazibwe referred court to Section 26 of Civil Procedure Act which empowered court to exercise its discretion to determine interest, and prayed that since the plaintiff had asked for 35% per annum the court ought to look at the circumstances of this case to allow interest at that rate. The rate would take into account inflation. Counsel argued further that there was no justification to withhold payment of DAP and gratuity which fell due on retirement date. If payment had been in time, the plaintiff would have put to use those retirement benefits either to trade or any other profitable venture. Court has in the past awarded interest at commercial rate from the date of retirement until payment in full.
In reply, Mr. Kabombo, while agreeing with the plaintiff’s counsel that the question of interest was a matter for court’s discretion, prayed that in exercising its discretion, court should take into account the following:
b) This matter has been determined by the parties with the full cooperation of the defendant. In the same spirit, the interest should not be put so high. The defendant has lent his hand to the negotiations and fully cooperated. A rate of 10 - 15% would be appropriate.
c) As to when the interest would begin to run, counsel referred court to Sietco Builders Vs Noble Builders (U) Ltd, SCCA 31 of 1995, and prayed that interest should not run from when the plaintiff retired, but from when plaintiff filed this suit. It was filed in November 2008.
Counsel reiterated his prayer that Interest should begin running from the date of retirement because that is when the amounts fell due for payment. Had that money been paid, the defendant would not have filed this suit. He distinguished the authority referred to by counsel from the present one in that the plaintiff in Sietco’s case had sought for interest from the date of filing his suit, while in the present case, interest was sought from the date of retirement. He prayed for interest at commercial rate of 35% per annum.
1. Mr. Majjellan Kazibwe Counsel for Plaintiff
2. Mr. Kabombo Counsel for Defendant
Mr. Mukwaya - Court Clerk