The High court has ordered Haruna Sentongo, a brother to city businessman Hamis Kiggundu to pay Orient bank more than Shs 10 billion accrued from loans advanced to him.
In a judgment issued by commercial division judge, Richard Wejuli Wabwire, the court found that indeed Sentongo had contracted the loans that he was avoiding paying through litigation. In 2018, Sentongo ran to court seeking orders to stop Orient bank from demanding from him Shs 10 billion.
According to court documents, Sentongo in 2015, obtained several loans from Orient to finance the development and completion of Nakayiza Mall in Kampala. He also sought loans to finance his imported garments business. He also sought an additional $3 million to enable him to complete Segawa Market also in Kampala.
However, in his court filings, Sentongo alleged that through extortionate schemes, coupled with duress, undue influence, bad faith, ill advice, and total dishonesty, Orient bank contracted him loans of very unfair, unconscionable, inadequate, extortionate, and unclear terms and conditions with the purpose of unjustly enriching itself at his expense.
He adds that the bank perpetually breached its statutory contractual and fiduciary duties to him and made irregular and fraudulent transactions on his bank account which he said complicated his performance and exposed him to excessive loss of income risk exposure, psychological torture, mental anguish, and torment.
Sentongo asked the court to award him special damages for loss of business and rental income amounting to Shs 500 million per month starting in February 2016.
In a countersuit, Orient bank also sued Sentongo seeking to recover over Shs 10 billion in loans it extended to him. The bank claimed that since May 2015, it offered Sentongo various loans that he defaulted on. The bank listed various loan facilities it had extended to Sentongo, amounting to Shs 9.695 billion, which he had failed to pay and subsequently grew to Shs 10.384 billion.
The bank also asked the court to grant it general damages amounting to Shs 2 billion for the reputational damage that Sentongo’s suit had caused it. At the hearing, the two suits were consolidated and then determined at once because they all raised similar issues and sought similar prayers.
In his ruling, Wabwire found that indeed Sentongo had sought and actually obtained the said loans and therefore cannot turn around and deny paying.
“The plaintiff has admitted that he received huge sums of money under the very mortgages, and cannot now seek to declare them unlawful. He cannot approbate and reprobate. He is checked by the doctrine of approbation and reprobation which stops one from recognizing that a transaction is valid, and thereby obtaining some advantages to which he could only be entitled on the footing that it is valid and then turn around and say it is void for the purpose of securing some other advantage,” Wabwire’s judgment reads in part.
It adds that even the allegation that the bank committed fraud by charging Sentongo more money than he actually was given, lacked supporting evidence.
“In the absence of evidence of any form of illegality that could have underpinned the transaction, the facility offer letters and mortgages constitute valid binding and enforceable contracts between the parties. The court finds that the contracts between the plaintiff and the defendant are valid and enforceable under the law. In the instant case, the allegations of misrepresentation are therefore not supported by any evidence. The plaintiff did not also adduce any evidence of undue influence or unconscionable terms,” the judgment reads.
The judge also observed that the fact that Sentongo was told that his property would be publicly auctioned if he did not pay or have it disposed of to pay the outstanding loans, cannot amount to coercion or duress but was a legitimate commercial pressure which in itself is not unlawful.
“From the facts before me, the evidence of acts of coercion and undue influence sought to be relied upon by the plaintiff includes allegations of falsification of his statement which would amount to fraud, alleged insider dealing, and champertous connivance between the defendant and downtown bags. This is not pleaded in the plaint… Fraud must be pleaded and proved which in the instance was not,” the judge ruled.
Justice Wabwire also described as disingenuous Sentongo’s assertions that the loans that were advanced to him did not have any duly signed supporting agreements. He said all the evidence that was shown to the court, bears various loan offer letters which Sentongo and the bank duly executed.
“I am convinced that the interest charged was in accordance with the agreed terms of the facilities. The defendant was entitled to the recoveries it made and the interest charged. In the context of the law and principle regarding unjust enrichment. I find the claim unfounded and unstainable…Plaintiff entered several credit facilities with the defendant bank. The said facilities were entered into with an undertaking that they shall be repaid by plaintiff with interest.
However, the plaintiff defaulted on this obligation and is indebted to the bank in unrepaid loans advanced. Sentongo was ordered to pay the bank the money he owes amounting to Shs 10.384 billion and general damages amounting to Shs 150 million. The judge not only awarded the costs of the suit to the bank but also awarded it a 22 per cent interest on both monies from the date of the judgment until Sentongo makes full payment.
Source: The Observer