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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT
KAMPALA
(COMMERCIAL COURT DIVISION)
HCT-00-CC-CS- 228 OF 2003
BYARUHANGA MUHUMUZA=============PLAINTIFF
VERSUS
CALTEX OIL (U) LTD================DEFENDANT
BEFORE: HON. JUSTICE LAMECK N. MUKASA
JUDGMENT
The Plaintiff, Byaruhaga Muhumuza Alfred’s claim is that from
1st January 1999 to November 2001, he was an employee of the
Defendant Company, Caltex Oil (Uganda) Limited. During the Plaintiff’s
term of employment with the Defendant Company, the Plaintiff applied for and was
granted a car loan under a Chattel Mortgage Scheme,
under which the Defendant
guaranteed the repayment of the said Chattel Mortgage with the Barclays Bank of
Uganda. Under the scheme
the Plaintiff acquired a Toyota Camry Registration No.
UAA 200U.
The Plaintiff claims that in November 2001 he resigned from his
employment with the Defendant Company. Under the car loan financing
scheme the
total repayment comprising of the principal loan of Shs. 21,000,000/= together
with interest amounted to Shs. 28,120,176/=.
Against that figure the Plaintiff
had, by the time of his resignation, paid Shs. 23,288,817/= plus other payments
allegedly not
credited by the Defendant on the chattel mortgage/car financing
loan. That upon resignation the Plaintiff sought to pay off all
the amount
outstanding on the car loan and that he proceeded to the Human Resources Manager
of the Defendant Company to off set payment
in satisfaction of the car loan but
that it was refused or rejected by the Defendant. That instead, the Defendant
took possession
of the Plaintiff’s car and gave it to another employee who
is currently using it.
The Plaintiff contends that the Defendant made
erroneous Debit Notes on the Plaintiff’s account by, inter alia, making
entries
of insurance recoveries against payments made by the Plaintiff instead
of crediting the same to repaying the chattel mortgage/car-financing
loan.
Further the Plaintiff claims that from the 16th November
2001 when the Defendant took possession of the Motor Vehicle to date the
Plaintiff has resorted to the use of alternative
transport at cost of Shs.
60,000/= per day.
It is also the Plaintiffs claim that at the time of his
resignation he was not paid his salary for the days of the month worked,
terminal
benefits and a refund of his provident fund savings. That the usual
practice of staff who leaves the Defendant employment, is to
compute the amount
due as salary, terminal benefits and provident fund saving, with the
Defendant’s Human Resource Manager
who however declined to compute the
amount due and owing to the Plaintiff.
The Plaintiff therefore
sought for: -
(1) Declaration that he is the owner of Motor Vehicle Registration No. UAA 200U Toyota Camry, which he is entitled to redeem under the chattel mortgage with the Defendant. (2) Recovery of the Motor Vehicle in the same state of repair and mechanical condition as of 14th November 2001. (3) An adjustment and reconciliation of the Motor Vehicle accounts between the Plaintiff and the Defendant for the determination of the amount payable for its redemption. (4) Loss of user or in the alternative hire charges of the Plaintiff’s Motor Vehicle by the Defendant less the amount found due and payable under item 2 above by the Plaintiff to the Defendant. (5) An Order directing the Plaintiff to compute
(a) The Plaintiff salary arrears and terminal benefits coupled with an order for payment of the same.
(b) The provident fund savings due to the Plaintiff coupled with an order for its refund.
(6) General damages.
The Defendant’s case is that in
November 2001 the Plaintiff was dismissed from is job on the basis that he had
been assisting
in duping fuel at fuel stations in Soroti and Katakwi. That at
the time of his dismissal he had not completed repaying the car loan
he had
obtained under the chattel mortgage scheme repayment of which the Defendant had
guaranteed with the Barclay Bank of Uganda.
At the time the Plaintiff left the
Defendant Company he owed Shs. 10,034,275/= arising out car loan.
The
following facts were agreed upon by the parties during the scheduling
conference: -
1. That the Plaintiff was employed by the Defendant Company from 1st January 1999 to November 2001. 2. While in the employment the Plaintiff was entitled to benefits and allowances and most importantly a Motor Vehicle under the Defendant’s employee’s car loan scheme. 3. Pursuant to the said scheme the Plaintiff acquired Motor Vehicle Registration Number UAA 200U Toyota Camry under a chattels mortgage dated 1st April 1999. 4. Upon leaving employment the Defendant took possession of the said Motor Vehicles.
The
issues agreed upon for Court’s determination are: -
1. Whether the Plaintiff was summarily dismissed or whether he resigned. 2. Whether the Plaintiff was entitled to any benefits at the time he left the Defendant’s employment. 3. Whether the Defendant lawfully took over possession of the Motor Vehicle at the time the Plaintiff lefts its employment. 4. What remedies and reliefs are available to the Plaintiff.
Issue No. 1. Whether the Plaintiff was summarily dismissal or whether he resigned.
The Plaintiff in his testimony stated that he formally resigned from the Defendant Company on 14th November 2001. That he handed a resignation letter, exhibit P3, to the Defendant’s Manager Human Resources who verbally accepted it. That he also handed other a handover report, keys of the Defendants house he was occupying at the time and the Company documents which were then in his possession. The letter is referenced “Resignation from work as Retail Sales Executive” and in part states:
“I humbly wish to submit my resignation letter from duty as a Caltex Sales Executive effective today Wednesday 14th Nov. 2001.”
On behalf of the Defendant Company Kenneth Byangwa, DW1, a Lubricants Marketing Executive with the Defendant Company, testified that at the material time the Plaintiff was the Defendants Marketing Executive in charge of retail operations Eastern Uganda, a fact admitted by the Plaintiff. That sometime in November 2001 he travelled to Soroti to investigate fuel dumping at the Defendant’s stations in the region. The witness explained that the activity by which fuel belonging to another Company is off-loaded at a station belonging to the Defendant is termed “dumping” That in Soroti he found a truck not belonging to the Defendant dumping fuel at the Defendant’s station.
DW2, Russell Moro, a Legal Officer with the Defendant Company, testified that sometime on 14th November 2001 he attended a meeting, also attended by the Company’s General Manager, Retail Marketing Manager, Sales Executive, Ag. Manager Human Resources and one Julius Okeny a Retailer Soroti Service Station. Minutes of the meeting were tendered as exhibit D16. That at the meeting Julius Okeny regretted the dumping incident and informed the meeting that the Plaintiff had introduced the idea to him. That when the Plaintiff was called to defend himself he admitted that he had assisted the dealer only once but that he had not expected the dealer to continue with the practice. That the meeting resolved to dismiss the Plaintiff. DW3 Rachael Mirembe Namale, the current acting Human Resource Manager of the Defendant, testified that she is in possession of the Plaintiffs personal file on which is a letter of dismissal. She stated that there was no record on the file to show that the Plaintiff had tendered in his resignation.
The Plaintiff on the other hand denied ever having been dismissed. He testified that he got to know about the said letter of dismissal six months after his resignation and after instituting this suit when his lawyer showed a copy of it to him. He denied having appeared before any Disciplinary Committee and denied any involvement in illegal fuel transactions.
Mr. Kihika submitted that from the testimonies of the Defendant’s witnesses and taking into account the conduct and character of the Plaintiff as seen in exhibits D9 to D11 there was no doubt that the Plaintiff was dismissed from his employment as evidenced by the letter of dismissal (exhibit D1) as he had been in breach of the Defendant’s Code of Conduct and Staff regulation manual which he had pledged to abide by. He referred to exhibits D13 and D7. Counsel cited Eletu Vs. Uganda Airlines Corporation [1984] HCB 39 where it was held that: -
“Summary dismissal is dismissal without notice. At common law to justify such dismissal the breach of duty must be a serious one, a breaching amounting in effect to repudiation by the servant of his obligation under the contract of employment such as disobedience of lawful orders, misconduct, drunkenness.... In summary dismissal the employer gives no notice but in termination he must give notice or pay in lien of such notice”.
Exhibit D1 the letter of dismissal dated 14th November 2001 states:
“Mr. Byaruhaga.
Re: Dismissal.
Reference made to the meeting held today 14th November 2001 in the COU. Boardroom.
As you are aware the incident that took place at Soroti service station on 13th November 2001 in which Mr. Julius Okeny the dealer of the said station was caught in the act of dumping product into the station. Your role as the Sales Executive was to ensure that this practice is eliminated. Instead, by your own admission, you tried to protect the parties that were involved in the malpractice.
You also admitted having assisted the dealer to dump product at Katakwi service station on a different occasion. You obviously acted with intent to defraud the Company from personal gain, which is contrary to the Company’s Standards of Business Conduct and a breach of the terms and conditions of your employment.
You are with immediate effect dismissed from the service of Caltex Oil Uganda Ltd.”
Both the Plaintiff’s letter of
resignation, Exhibit P3 and the Defendant’s letter of dismissal exhibit,
D1, are dated
14th Nov. 2001. Under the Caltex Oil (Uganda) Limited
Staff Regurations Manual – Exhibit D7 – at page 26 the following
types
of terminations are listed:
(a) Retirement. (b) Death (c) Resignation (d) Dismissal for cause. (e) Physical Disability. (f) Lack of work (g) Reduction in force and other reasons.
Relevant in the instant case is
resignation or dismissal. The issue is by which mode of the two was the
Plaintiff’s employment
terminated.
It is trite or burden of proof
that he who alleges or asserts facts has a burden to prove them. See
sections 101 – 103 Evidence Act. The Plaintiff wants this court to
find that he resigned from his employment with the defendant Company effective
from 14th November 2001. Resignation is provided for at page 33 of
Caltex Staff Regulations Manual, Exhibit D7, where it provides: -
“1. RESIGNATION.
(a) The Company is entitled to receive the necessary notice in writing as specified in these regulations, expiring on a date of the month of the employee’s intention to resign.
(b) An employee who resigns should be requested to submit a letter of resignation. Regardless of whether a letter of resignation is received, a letter of acceptance of his written or verbal resignation should be promptly returned to the employee establishing the effective date of his termination, the date through which salary is to be paid, and any other pertinent condition or instructions.
(c) The employee will normally be required to work out the period of his notice, except where a Manager considers that his continued presence may counter productive to the Company’s operations, in which case he may be paid up to the date on which his notice would terminate and released immediately. (d) ........”
The Plaintiff had served the Company from 1st January 1999 to 14th November 2001 when his employment with the Defendant was terminated. That is a period of two years, and half months. The Regulations at page 29 provided that notice of termination on either side will be fifteen days if the service has lasted at least twelve months but less than three years. On acceptance of the resignation the regulations provides that prior approval of the appropriate company executive must be obtained before an employee can be released.
The Plaintiff’s testimony is that on 14th November 2001 he handed his resignation letter to the Manager Human Resources who accepted it verbally and the Plaintiff left work and did not come back to work. His testimony shows that there was no fifteen-day’s notice of his resignation given to the Defendant, there was no approval or written acceptance of the resignation by the Defendant. The Plaintiff was not released from employment upon resignation. The Plaintiff was bound by the Staff Regulations, which he failed to comply with while tendering his resignation. Therefore whether the Plaintiff is to be believed that he tendered resignation letter exhibit P3 to the Defendants Manager Human Resources or not, he has, on a balance of probabilities failed to prove that he complied with his employment terms and conditions relating to resignation. I accordingly find that the Plaintiffs employment with the Defendant was not terminated by resignation. If the Plaintiff testimony is to be believed that he voluntarily left his employment with the Defendant Company then his conduct amounted to one thing – abscondment from duty.
On the other hand the Defendant wants this court to find that the Plaintiff’s employment with the Defendant Company was terminated by summary dismissal on 14th November 2001. By exhibit D13 A the Plaintiff was given a copy of the Caltex Standards of Business Conduct Booklet, which he acknowledged receipt and undertook to comply with, vide exhibit D13 B. Exhibit D 14 is a February 2000 edition of the booklet, which at the bottom of its contents page states that all the previous publications of the Caltex Standards of Business Conduct were superseded by this booklet. On page 12 the book makes provision for conflicts of interest and states: -
“ Caltex requires that its employees not engage in or give the appearance of engaging in any activity involving any conflict or reasonably foreseeable conflict, between their personal interests and the interest of Caltex.”
Then it gives an illustrative list of examples of activities,
which violate Caltexs, Conflict of Interest Standards among, which is
the
following:-
“.....
• A more than minimal financial interest in an organisation dealing or seeking to deal with Caltex as a supplier or customers or which is a competitor of Caltex.
• Directing any business or financial opportunity for personal gain or assisting or enabling others to do so, if it can be reasonably anticipated that Caltex would be interested in such opportunity.”
The Defendant contends that the Plaintiff was engaged in
activities, which were compromising the interests of the Defendant as his
employer and for his personal gain which warranted disciplinary action. That a
disciplinary action was taken as a result of which
the applicant was summarily
dismissed.
Regulation SR 300. 1 at page 23 of the Staff Regulations
Manual spells out offences, which would render a member of Staff involved
liable
to disciplinary action including instant dismissal. Such offences include
theft, fraud or dishonesty in connection with the
Company’s business or
property, misconduct and undeclared conflict of interest, among others.
Regulation SR 300.2 requires
that where disciplinary action has to be taken, the
member of Staff concerned should be given a right to fair hearing. The decision
to dismiss must be a Company decision made after consultation with the Human
Resources Department. Under the Regulations dismissal
can be resorted to where
the member of Staff has committed a gross offence.
In the dismissal
letter exhibit D1 the Plaintiff is accused of abating dumping at the service
station operated by one Julius Okeny
at Soroti, abating dumping at Katakwi
service station and defrauding the Company for personal gain contrary to the
Company’s
Standards of Business Conduct. Clearly the above accusations
are activities, which would amount to conflict of interest provided
for in the
Caltex Standards of Business Conduct – Exhibit D14. This would be
diverting the company’s business for personal
gain and/or assisting others
to do so. Such would be offences under Regulation SR 300.1 of the Staff
Regulations Manual and would
render the Plaintiff liable to disciplinary action
including dismissal.
To prove its case the Defendant company relied on
the testimony of DW1 and DW2 and exhibits D9, D10, D11 and D16. It is both the
Plaintiff’s and the Defendants evidence that at all material times the
Plaintiff was the defendant’s Marketing/Sales
Executive in change of
Retail Operations t/a Eastern Uganda which included the area from Jinja to
Soroti and Katakwi.
DW1 Kenneth Byangwa testified that in November 2001
he found a truck not belonging to the Defendant dumping fuel in the Defendants
station at Soroti. The fuel did not originate from the defendant. Clearly this
amounted to diversion of the Defendants business
and financial benefits. DW2
testified that the incident was in a meeting held on 14th November
2001 admitted by Julius Okeny the Defendants operator of the stantion. That
when the Plaintiff was called in the meeting
and asked to defend himself he
admitted once having assisted the dealer in the commission of the malpractice.
In that meeting it
was established that the Plaintiff had, by facilitating the
dealer to dump fuel in the company station, defrauded the company. It
was
decided that the Plaintiff should be dismissed forthwith. That following that
decision the Plaintiff was dismissed. This is
reflected in minutes of the
meeting held on 14th November 2001 – Exhibit D16. Raphael
Mirembe Namale (DW3), the current Acting Human Resource Manager testified that
records
on the Plaintiffs file indicate that he was dismissed on 14th
November 2001. The letter of dismissal was received in evidence as exhibit D1.
The letter was dated 14th November 2001 and it stated that the
Plaintiff was dismissed with immediate effect.
On the defence evidence
outlined above I find that the Plaintiff was on 14th November 2001
dismissed from his employment with the Defendant. As to whether such dismissal
was lawful or not was not an issue
flamed for my determination and it was not
addressed by the pleadings of any of the parties. In Nairobi City Council
Vs. Thabiti Enterprise Ltd [1995 – 1998] 2 EA 231, it was held
that a judge had no power or jurisdiction to decide an issue which had not be
pleaded unless the pleadings were suitably
amended. Also in Galaxy Paint
Co. Ltd Vs. Falcon Grounds Ltd [2000] 2 EA 385 it was held that the
issue for determination in a suit generally flowed from the pleadings and a
trial court could only pronounce
judgment on the issue arising from the
pleadings or such issues as the parties framed for the Court determination.
That unless pleadings
were amended parties were confined to their pleading. A
party is bound by his pleadings. I will therefore not venture into the
legality
of the dismissal. In final answer to the first issue my finding is that the
Plaintiff was summarily dismissed from his
employment with the
Defendant.
Issue No: 2 Whether the Plaintiff was entitled to any
benefits at the time he left the Defendants employment.
In paragraph 4 (b) of the Plaint it is pleaded that while in the
employment of the Defendant, the Plaintiff was entitled to benefits
and
allowances.
In that regard the Plaintiff’s prayer in the plaint is,
inter alia, for an order directing the Defendant to compute the
Plaintiff’s
salary arrears and terminal benefits and for an order
directing the Defendant to compute the provident fund savings due to the
Plaintiff
and payment or refund of the same. In its written statement of
defence the Defendant contended that upon dismissal the Plaintiff
lost all
rights to benefits.
In his testimony the Plaintiff stated that on his
resignation he held a meeting with the Manager Human Resources and requested for
payment of his salary for the month of his resignation, his monthly allowances
and terminal benefits to be computed in accordance
with the Caltex Staff Manual.
That he had worked his out benefits with the Human Resources Manager, which had
come up to
ü Provident fund saving - Shs. 2,600,952/=
ü Mileage claim - Shs. 1,552,200/=
ü Terminal benefits to be determined by the company as aforestated. The benefits have never been paid.
Counsel for the Plaintiff submitted that the Plaintiff was
entitled to benefits, terminal and Salary arrears. His submission was
based on
the contention that the Plaintiff had resigned. On the other hand counsel for
the Defendant submitted that the Plaintiff
was summarily dismissed and as such
was not entitled to any benefits. Caltex oil (Uganda) Ltd Staff Regulations
Manual at page 33
provides that in the case of resignation, a member of staff
will received his accrued provident benefits as per rules of the fund,
NSSF
benefits plus any accrued leave pay. I have already held that the Plaintiff was
summarily dismissed; therefore he cannot recover
under this
provision.
Regarding the provident fund savings counsel for the Defendant
submitted that the Plaintiff is not entitled to the contributions made
because
he was in breach of rule 19 of the provident funds rule. Exhibit D8 is a bundle
of documents which include a Memorandum
addressed to the Plaintiff, the Fund
Designation of Beneficiary Form whereby the Plaintiff applied for membership,
the Fund Trustee
Deed and a schedule of the Fund Rules. These documents show
that the plaintiff was a member of the Provident Fund. The fund is
managed by a
board of trustees. Member’s contributions to the fund are equal to 5% or
10% of his monthly salary deductable
by the Company from his salary and paid to
the Trustees. The Plaintiff had opted to contribute 10%. Each month during the
period
of the fund the Company contributes to the fund for the credit of each
member an amount equal to that contributed by the member.
Rule 12 of the
Provident Fund Rules provides:
“12 Payments of benefits with respect to a member under this Fund shall be made only in the event of discontinuance of his membership in accordance with Rule 4 hereof....”
Rules 4 provides: -
“Membership in the Fund shall continue until the member dies, becomes permanently and totally disabled, ceases to be an employee, suspends his contributions to the Fund under Rule 25 hereof, or is subject of forfeiture under Rule 20 but in no event beyond the last day of the calendar month in which the member attains the age of fifty five (55)...”
Relevant in the instant case is that the Plaintiff had ceased to
be an employee of the company. The rule does not make any distinction
as to the
manner in which the member ceases to be an employee. However rule 19 entitled
“Dishonesty – Limitation of
Benefits”
provides: -
“Anything herein to the contrary notwithstanding, and regardless of the member’s length of continuous service if the company shall establish to the satisfaction of the Trustees that a member has committed a dishonest act thereby causing any loss or expense to the company all his rights to any benefits whatsoever from the company’s contributions to its account shall thereafter terminate and such contributions shall in the first place be used to make good such loss or expense and the balance shall be forfeited to the fund.”
For a member to loose his benefits under the above rule it is
mandatory that the company must establish to the satisfaction of the
Trustees
one that a member has committed a dishonest act, and two that he has thereby
caused any loss or expense to the Company.
There is no evidence that the
company did so satisfy the Trustees. Secondly where the Trustees have been so
satisfied the member
only looses his rights to benefits from the Company’s
contributions and not his personal contributions.
Pursuant to Rules 4
and 12 read together the Plaintiff benefits under the Fund became payable when
he was dismissed. Rule 17 requires
the benefits when they became payable to be
made as promptly as possible. Rule 13 provides for the mode of computation of
amounts
payable to a number under the Fund. It is the Plaintiff’s prayer
that an order is made directing the Defendant to compute
the provident fund
savings due to the Plaintiff coupled with an order for its refund. In view of
my finding above, the Plaintiff
is entitled to his benefits under the provident
fund.
Regarding salary arrears and retirement benefits, in Eletu
-Vs- Uganda Airline Corporation [1984] HCB 39 it was held that it is
trite that salary and other terminal benefits should be claimed by way of
special damages which must be pleaded
and strictly proved. Therefore, there
should have been a separate sub-heading particularising the special damages in
the plaint.
In paragraph 4 (l) it is pleaded that at the time of the
Plaintiff’s resignation (termination of service with the Defendant),
the
Plaintiff was not paid his salary for the days worked and terminal benefits.
And prayer (e) is for an order directing the Defendant
to compute the Plaintiffs
salary arrears and terminal benefits compiled with an order for payment of the
same.
The plaint is short of particularising the Plaintiff’s claim
for salary arrears and retirement benefit. Further the Plaintiff
did not adduce
any evidence to show how much he had earned by way of monthly salary and unpaid
by the termination of his services.
No evidence as to the benefits he was
entitled to or termination of service or how much he was entitled under that
head. Counsel
for the Plaintiff submitted that the Plaintiff did not
particularise the benefits and salary arrears as special damages because a
reconciliation of accounts was in the circumstance required to be done by the
Defendant and be analysed by the Plaintiff. With due
respect I do not agree.
An employees salary and retirement benefits are always within the
employee’s terms and conditions
of employment communicated on employment
and changes therein are normally communicated to the employee. Therefore the
employee’s
salary and retirement benefit’s would always be within
his knowledge.
A dismissed employee is only entitled to recover arrears
of salaries due to him and benefits that have accrued for the completed period
of service. See Elizabeth Imagara & 2 others -Vs- AG. High Court C.S
No. 64 of 1993 (High Court Judgment Vol. 3 Civil page 91). Such would
be accrued earnings or benefits but none was pleaded or proved in the instant
case. I accordingly find that the Plaintiffs
claim for salary arrears and
retirement benefits fails.
Issue No. 3 whether the Defendant
lawfully took over possession of the Motor Vehicle at the time the
Plaintiff left its employment.
It was an agreed fact that while
in the Defendants employment, the Plaintiff was entitled to acquire and did
acquire a Motor Vehicle
Toyota Camry Registration No. UAA 200U under the Caltex
Staff Loan’s Scheme pursuant to a Chattel Mortgage Deed dated
1st October 1999 (Exhibit P1). It was further agreed that upon the
Plaintiffs leaving employment the Defendant took possession of the
said
vehicle.
Under the Chattel Mortgage the Defendant provided a guarantee to
M/s Barclays Bank of Uganda for the repayment of loan advanced to
the Plaintiff
for the purchase of the motor vehicle plus interest thereon. The Plaintiff
under the Chattel Mortgage agreed to provide
by way of security for the
repayment of all rentals together with interests, costs and expenses the said
motor vehicle. Of particular
importance to this case the Chattel Mortgage
provided: -
“3.1 It shall be lawful for Caltex...to enter onto any premises on which the Chattel is....and seize or take possession of the same and on expiration of fourteen (14) days from the date of such seizure or taking possession to sell it either by public auction or private treaty without recourse to court...
3.2 Until the Mortgagor makes default in the payment of any monies hereby secured....or until the Mortgagor leaves Caltex’s employment..., the Mortgagor may retain possession and use of the property herein assigned.
3.3 If at any time during the continuance of this instrument default is made by the Mortgagor in payment of any instalment of principal on the day when the same ought to be paid according to the terms thereof or...then and in every such case Caltex or it agents may immediately thereupon or at any time thereafter without any previous or further notice or concurrence or the part of the Mortgagor and notwithstanding any subsequent acceptance of any payment of principal money or interest due or this security enter upon any lands or premises whereon the Chattel for the time being may be and take possession thereof and sell or dispose of the same by private sale or public auction....
Any deficiency between the aforesaid purchase price and the sum due to Caltex hereunder at the time of such sale together with all expenses pertaining to the same shall be made good by the Mortgagor and be recoverable by Caltex as liquidated damages but any excess to the aforesaid shall belong to the Mortgagor”
The Plaintiff testified that on leaving employment he was required to park the vehicle at the Defendant’s premises and surrender the keys until he had settled the balance outstanding on the Car Loan Scheme. That on 20th November 2001 the Plaintiff held a meeting with the Defendant’s Human Resource Manager in which the outstanding balance was calculated to be Shs. 5,000,000/=. That armed with cash in the said sum, the Plaintiff went to the Human Resource Manager for a clearance to enable him pay the money to the cashier. It was then that the Human Resource Manager told the Plaintiff that she had instructions not to hand back the Car and she refused to accept the money.
In its written statement of defence the Defendant stated that at the termination of the Plaintiffs employment the Plaintiff owed a sum of Shs. 10,034,275/= under the Car Loan Scheme. Exhibit D4 a fax dated 11th December 2001 from Barclays Bank to the Defendants Human Resource Manager shows that the Plaintiffs loan was outstanding in the above figure. The Plaintiff, in his reply to the Defendant’s written statement of defence paragraph 3, detailed out deposits made on the loan account deducted directly for his salary by the Defendant and indicated the total balance due, interest inclusive, to be Shs. 10,034,275/= as at 14th November 2001. It is trite that a party is bound by his pleadings. I accordingly find that at the termination of the Plaintiff employment there was an outstanding balance due under the Car Loan Scheme in the sum of Shs. 10,034,275/=.
The Plaintiff, as shown by Exhibit P5, was the registered owner of the Motor Vehicle. As such, under section 30 of the Traffic and Road Safety Act, Cap 361, the Plaintiff is the presumed owner of the vehicle unless a contrary is proved. However under the Chattel Mortgage, the Defendant Company had a lien on the vehicle until the Plaintiff had paid all the moneys due under the mortgage, reference is made to clause 3.5 of the Chattel Mortgage Deed (Exhibit P1). Pursuant to clause 3.2 of the Chattel Mortgage the Plaintiff on leaving the Defendant’s employment lost his right to retain possession and use of the motor vehicle since there were outstanding payments on the loan.
The Plaintiff in his testimony argued that there was a car maintenance scheme under which 15% of his monthly salary was deducted and retained by the Defendant. That on that account he had accumulated savings amounting to Shs. 4,713,771/=. He contended that this money was his, held by the Defendant entrust for him. The Plaintiff testified that in the discussions with the Human Resource Manager that the above figure was to be offset from the loan balance which would reduce the balance due to Shs. 5,320,504/=. The existence of this scheme was not denied by the Defendant. The Defendants only pleading with regard to this scheme was that the Plaintiff was not entitled to make payment by way of setoff under the terms of the Chattel Mortgage. The Defendant relied on clause 2.11 (a) of the Chattel Mortgage as reflected in Plaintiff cross-examination. The clause provided: -
“All existing and future claims and rights to setoff by the Mortgagor against moneys payable under this instruct are hereby waived...”
Clearly pursuant to the above provision the Plaintiffs claim
under the car maintenance scheme could not be setoff by the Plaintiff
against
the money that was outstanding under the loan.
That being that it is not
disputed that the Plaintiff is entitled to his savings under the car maintenance
scheme. The Plaintiffs
evidence in this regard was not challenged. In
Uganda Revenue Authority –Vs- Stephen Mabosi – SCCA No. 26 of 1995
and James Serubiri & Fred Musisi – Vs –
Uganda, Criminal Appeal
No. 5 of 1990, the holdings were to the effect that an omission or
neglect to challenge the evidence in – chief on a material or essential
point by cross-examination would lead to the inference that the evidence is
accepted. The Plaintiff was only challenged on how he
arrived at the figure of
Shs. 4,713,771/= which he claimed had accumulated in his favour under the
scheme. The Plaintiff did not
produce in evidence the monthly pay slips or the
Account allegedly maintained with the Defendant. Therefore the Plaintiff has
failed
to prove the sum Shs. 4,713,771/= as the amount which had accumulated on
his account under the car maintenance scheme.
The Plaintiff testified
about other claims, which he contended should have been used to offset his
indebtedness under the car loan.
In paragraph 4(g) of the plaint it was pleaded
that the Defendant had made erroneous debits or the Plaintiffs personal account
with
the Defendant Company. In paragraph 5 of his reply to the written
statement of defence and in his testimony the Plaintiff listed
various entries
on his personal account, which he claimed had been erroneously debited thereon.
He argued that due to the erroneous
debits entries the Defendant Company had
claim that the Plaintiff owes it a total sum of Shs. 11,709,198/03. He stated
that, to
the contrary, he owes the Defendant Company only a sum of Shs
2,140,597/=. He contended that the difference between the two figures,
which is
Shs. 9,568,599/03, was erroneous. He prayed of an order that the Defendant
should write off the erroneous debits of Shs.
9,568,599/03, setoff the sum of
Shs. 2,140,597/= admitted by the Plaintiff as his true indebtedness to the
Defendant from the funds
owed by the Defendant to him. From the balance due to
him setoff the amount due to the Bank under the car loan scheme and release
the
car to him.
Among his claims due from Defendant Company the Plaintiff
claimed that he was entitled to a mileage on the use of his car. That for
the
month of November he was entitled to Shs. 1,552,200/= and had filed in itinerary
sheets which he stated were in the possession
of the Defendant. The Plaintiff
did not adduce any evidence to prove the entitlement to mileage claims. No
evidence of the unpaid
itinerancy sheets was adduced. Though the sheets were
stated to be in the possession of the Defendant the Plaintiff was free to
utilise Order 10 of the Civil Procedure Rules, which was not done.
In
his reply to the Written Statement of Defence the Plaintiff among the erroneous
debit entries listed is a sum of Shs. 4,357,094/=
which the Plaintiff testified
had been written off by the Defendant for the period 1999 – 2001 for all
cars acquired under
the car loan scheme. The Plaintiff testified that he had
ascertained the figure from a letter dated 13th August 2001 –
exhibit D15. By that letter the Plaintiff was informed that he owed the
Defendant Company an outstanding balance
on the car insurance in a total sum of
Shs.4, 357,094/=. The amount was deductable effective August 1st,
2001 in 36 equal monthly instalments of Shs. 121,030/= until the amount was
fully recovered. The Plaintiff however claimed that
he was entitled to a rebate
in the above sum. He testified that by a communication dated 20th
March 2002 all the insurance monies recoverable on vehicles acquired by staff
under the car loan scheme were written off by the Defendant
Company. The
evidence shows that the above sum had accrued before the Plaintiff had left the
Defendant’s employment. The
alleged communication of the rebate of
28th March 2002, which was itself after the departure of the
Plaintiff, was not exhibited in court. The Plaintiff has thereby failed
to
prove that he was a beneficiary to the rebate allegedly communication on
28th March 2002, if at it was there.
In his testimony the
Plaintiff also claimed a sum of Shs. 4,086,452/= which he stated had been
erroneously debited on his account
as excess phone bills. The excess phone
bills would be set off from his allowances. He stated that by the time he left
the company
he had no excess phone bills but was surprised when he discovered in
2003 that the company continued to debit his account with telephone
bills for
the periods covering even years after he had left the Company. However no
record of such debits of excess telephone bills
were exhibited in court and it
was not claimed in any of the Plaintiffs pleadings.
With regard to the
other debits claimed in paragraph 5 of the Plaintiff’s reply to the
written statement of defence as erroneously
made on his personal account with
the Defendant no evidence was adduced to prove the debits. The
Plaintiff’s personal account
was not produced in evidence.
My
finding above not withstanding, pursuant to clause 2.11 (c) of the chattel
mortgage the Plaintiffs claims as outlined above even
if proved could not be set
off by the Plaintiff against the money that was outstanding under the Car Loan
Scheme. That takes me
back to the main issue whether the Defendant lawfully
took over possession of the Motor Vehicle at the time the Plaintiff left its
employment. As I have already found, hereinabove, both in his Reply to the
Written Statement of Defence and in his testimony during
cross-examined, the
Plaintiff admits that the outstanding balance due to Barclays Bank under the Car
Loan Scheme was Shs. 10,034,275/=
as at the termination of his employment.
Pursuant to clause 3.2 of the Chattel Mortgage the Plaintiff on leaving the
Defendants
employment lost his right to retain possession and use of the Motor
Vehicle. In default of payment the Defendant Company is by clause
3.3 empowered
to take possession of the Mortgage Chattel, in the instant case the vehicle.
However having taken possession the company
was supposed on the expiry of 14
days for taking possession to sale or dispose of the vehicle by private sale or
public auction.
The proceeds are to be employed to settle the balance due to
the Defendant under the Mortgage and the seizure or disposal expenses,
then the
balance is passed over to the Mortgagor, in the instant case the
Plaintiff.
The fax dated 11th December 2001 from Barclays Bank
to the Human Resources Manager (Exhibit D4) showed that the Plaintiffs Car Loan
was outstanding
in the total sum of Shs. 10,034,275/=. The letter exhibit D3
dated 10th December 2001 shows that by cheque No. 506193 the
Defendant paid the above sum to Barclays Bank in settlement of the account
balance
and accrued interest on the Plaintiff’s Loan. The Motor Vehicle
inspection/valuation report dated 11th December 2001 – Exhibit
D6 – shows that the Motor Vehicle market value was put at Shs. 7,300,000/=
by M/s Kavuma & Advocates. By a memorandum dated
18th December 2001 – exhibit D5 – the Defendant offered
to sale the Motor Vehicle to on Joseph Bukenya at Shs. 8,667,138/=
again under
the Car Loan Scheme. This offer was accepted by the said Joseph Bukenya on
20th December 2001. The above evidence shows at the provisions of
the Chattel Mortgage on seizure of the Mortgaged property were complied
with by
the Defendant Company. I accordingly find that the Defendant lawfully took
possession of the Motor Vehicle.
Lastly is the issue of remedies and
reliefs available to the Plaintiff. In making my final order I am guided by my
findings and decisions
made herein above and section 98 of the Civil Procedure
Act, which grants this court inherit powers to make such orders as may be
necessary for the ends of justice or to prevent abuse of the process of court.
Below are my final findings and orders:
1. The Plaintiff was on 14th November 2001 summarily dismissed from the Defendant Company’s employment.
2. The Plaintiff is entitled to payment of his benefits under the Provident Fund Savings. It is accordingly ordered that the Defendant do cause the Plaintiff’s benefits under the fund to be computed and paid to the Plaintiff.
3. The Plaintiffs claim for salary arrears and terminal benefits was neither specifically pleaded nor strictly proved. It accordingly fails.
4. The Plaintiffs Savings under the Car Maintenance Scheme was Plaintiff’s money held by the Defendant in trust for the Plaintiff. The Plaintiff is entitled to recover his savings under the scheme. I accordingly order the Defendant do compute the Plaintiffs savings under the scheme up to the date of termination of his employment and pay the same to the Plaintiff.
5. Pursuant to the provisions of the Chattel Mortgage between the Plaintiff and the Defendant Company dated 1st April 1999 and binding on both parties the Defendant Company lawfully took over possession of the Motor Vehicle at the time the Plaintiff left its employment, and lawfully sold or disposed of it. Consequently the Plaintiffs prayers relating thereto fail.
The
Plaintiff had in his pleadings prayed for general damages. Unfortunately the
issue of general damages was, throughout the Plaintiffs
testimony and in his
counsel’s submissions abandoned. In the circumstances I make no award
under this head.
The Plaintiff’s suit has partial succeeded and
partially failed. In view thereof the Plaintiff is awarded 50% of the costs
of
this suit.
I so order.
Lameck N. Mukasa
JUDGE
5/05/06
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