Court name
Supreme Court of Uganda
Case number
Civil Appeal-2009/12
Judgment date
21 December 2012

Semyalo v The Registered Trustees Kampala Archdiocese (Civil Appeal-2009/12) [2012] UGSC 11 (21 December 2012);

Cite this case
[2012] UGSC 11
Short summary:
Contract Law, Breach of Contract, Misrepresentation
Coram
Tsekooko, JSC
Tumwesigye, JSC

THE REPUBLIC OF UGANDA

IN THE SUPREME COURT OF UGANDA

AT KAMPALA

 

[Coram:    Odoki, CJ., Tsekooko,  Kitumba, Tumwesigye & Kisaakye, JJSC.]

                                                                               

Civil Appeal No. 12 of 2009

 

                                          Between

                                 

SEMYALO  MICHAEL                  :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::  APPELLANT

                                                And

THE  REGISTRED  TRUSTEES  ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT

OF  KAMPALA  ARCHDIOCESE

 

{Appeal from the decision of the Court of Appeal at Kampala (Okello, Mpagi-Bahigeine & Engwau, JJA ) dated 27th February,, 2008 in Civil Appeal No. 12  of 2006.}

 

 

JUDGMENT OF J.W.N. TSEKOOKO, JSC.

This is a second appeal.  It arises from the judgment of the Court of Appeal which reversed the decision of the High Court and dismissed the Suit filed there by the appellant.

 

BACKGROUND:

Sometime in the 1950s the late Archbishop Kiwanuka (RIP) of the Catholic Church in Uganda conceived the idea of establishing a Micro Finance Institution as a church based project.  The purpose was to alleviate poverty especially among the rural poor.  The clergy and some lay apostolates embraced and developed the idea over the years.  Eventually a private limited liability company known as Centenary Rural Development Trust (the Trust) was incorporated on 06th April, 1983.

 

Among the major objectives of the trust was to operate as a credit institution through its branches all over Uganda.  It was principally to offer credit facilities to the rural poor.

 

The trust used the existing Catholic Dioceses as its share holders.  Many Christians contributed money to enable their dioceses to purchase shares allotted to them in the Trust.  The appellant was among the hundreds of parishioners who contributed to some of the shares purchased by the respondent in the Trust.  The appellant also made further contributions in the names of his then three infant daughters namely, Namayanja Julian, Nanyondo Immaculate and Namyalo Stella.

 

The model arrangement was copied from South America where the practice has existed for over 150 years and the practice there is called “Unit Trust Investment”.  Under the arrangement, the understanding is that a contributor who wishes to withdraw would be free to do so at any time.  There is a formula known as “Gordon’s Growth Model Formula” that is applied to calculate the amount of the investment of the withdrawing contributor plus the accruing interest thereon.  At the time when this case started in the High Court, there were about 600,000 such contributors.  Some years later, the Trust Company received a license to operate as a bank.  Consequently, it changed its name to “Centenary Rural Development Bank Ltd”, (the Bank).

 

The appellant and twelve others including his aforementioned three infant daughters later sued the Bank claiming, among other things:—

  1. That their names had been wrongfully omitted from the Trust Bank’s register of members.
  2. That at the time they made contributions they had falsely been made to believe that they were paying for ordinary shares in the company whereas not.

 

The appellant and his