Supreme Court Criticized As Goodman Gets Shs 21 Billion

When the Constitutional court awarded Shs 12.9bn to little- known lawyer Severino Twinobusingye in 2012, after he had sued government over the Amama Mbabazi oil bribes affair, many Ugandans were shocked by this “exorbitant” amount.

Since then, courts have seemed careful when it comes to awarding costs and damages to litigants. But as DERRICK KIYONGA reports, one unreported case is likely to cause uproar.

After 18 years of legal battles, the transport company Goodman Agencies Limited is set get Shs 21bn, following a Supreme court ruling heavily criticized by one dissenting judge.

In a majority decision of 6-1, on April 10, 2015, the Supreme court justices led by Chief Justice Bart Magunda Katureebe, Jotham Tumwesigye, Benjamin Odoki and John Wilson Natabu Tsekooko, Galdino Okello and Christine Kitumba ruled that Goodman should be paid Shs 21bn as a compensation of the 10 trucks which were confiscated by Uganda’s security agencies. But their fellow judge Esther Kisaakye dissented, saying that Goodman agencies deserved only Shs 14.4bn.

The protracted legal battle has seen Goodman battle out the case with Hassa Agencies Limited, a Kenya-based transporting company, and the attorney general in the High court, Constitutional court and finally the Supreme court which is the last appellant court.

GENESIS

Goodman agencies were bailees of ten trucks which were seized by soldiers in 1996. The trucks were allegedly confiscated by a combination of Uganda’s Presidential Guard Brigade and Rwandese forces in western Uganda, at the height of the war in eastern Democratic Republic of Congo. A source privy to the case told The Observer last week that after seizure, the trucks were used to transport soldiers to the battle zone in Congo.

The ownership of Goodman was not readily established by press time, although security sources told The Observer that the company originally had links to powerful figures in Uganda’s political establishment.

Court records show that the trucks which were confiscated were owned by Rwandese nationals Kasine Elian (MBenz ABO228), Jean Mugerwa (MBenz KN6511M), Faustein Musheruri (MBENZ AC3239), Tharcise Rwezaho (MBenz AC3917), Joseph Simbizi (MBenz kv2846D), Janvier Busogi (MBenz KV7298C,Airfreight services (MBenz KV 6287C), Leonidas Felesi (MBenz IB 0933), Airfreight services(MAN AC 2406 and Francis Kagabo (Renault CBH280 AB 9900).

The trucks, which had trailers, used to ply long routes of Mombasa to Kampala to Kigali. In a curious move, after the seizure of the trucks, Goodman suspended its lucrative transportation business as it pursued the civil suit against government.

In 1997, Goodman together with its partners Hassa agencies challenged the seizure of the trucks in the High court against the attorney general. At some stage, the High court struck out Hassa from the suit before it could be disposed of. On September 2, 2005, because the case had security ramifications, the attorney general decided to enter into a consent judgment with Goodman agencies.

The security ramifications were that during the seizure of the trucks, all drivers and their support staff whose numbers couldn’t be verified by The Observer were killed by the soldiers.

In the consent judgment, the then attorney general Khiddu Makubuya agreed to pay Goodman Shs 14.4bn. Apparently, Hassa agencies was taken by surprise by the settlement, hence on September 12, 2005, after the consent judgment had been filed and sealed in the court, the company hurriedly applied to be included in the consent judgment.

Within two days, trial Judge Patrick Tabaro granted the application and added Hassa agencies to the consent judgment as one of the “judgment creditors”.

Goodman, which was not involved in the process that led to the inclusion of Hassa successfully petitioned the Constitutional court, challenging the whole process.

The Constitutional court disapproved the procedure used by Justice Tabaro and ruled that the judge erred when he added Hassa to the consent judgment. The same Constitutional court awarded Goodman an interest of 24 percent, per annum, on the 14.4 billion.

This prompted the attorney general to file an appeal in the Supreme court challenging the interest of 24 per cent per annum awarded to Goodman. During the hearing of final arguments in the Supreme court in 2011, the commissioner for civil litigation, Robinah Rwakojo, argued that it was wrong for Goodman to get the said interest, since the parties had entered into a consent judgment which did not carry interest.

Rwakojo criticized the Constitutional court for awarding interest of 24 percent, per annum, on the claim that the attorney general had delayed to pay in time the agreed amount in the consent judgment.

Rwakojo implied that Hassa’s application to join the consent judgment and the subsequent proceedings caused the delay, hence the award of interest was not justified. But this was rejected by Goodman’s lead counsel, James Okuku, who argued that the company’s commercial operations had been affected by the soldiers’ actions.

AFFIDAVIT

In their judgment, the Supreme court justices observed that though in the consent judgment the interest on damages was not included, it was specifically prayed for in an affidavit that supported Goodman’s petition in the Constitutional court.

They agreed with Okuku that the consent judgment had now become a debt, which according to the Government Proceedings Act, attracted interest. But they slashed the interest award from 24 per cent to six per cent per annum from 2005.

“This is an issue on which we are prepared to show rational concern about public funds. We, therefore, hold that in the circumstances of this case, in principle the respondents [Goodman] are entitled to interest by 24 per cent is rather on the higher side,” they ruled.

WINDFALL

However, Justice Kisaakye was even more critical of the Constitutional court’s award to Goodman, which would have seen the company getting Shs 45 billion for their hired, very old, uninsured trucks.

“It is inconceivable that these old vehicles were running efficiently without breaking down for 20 days every month. That Goodman agencies was assured of hiring out each of the 10 trucks 20 days of each month from 1996 to 2005 when the consent judgment was signed without experiencing any low periods in business,” she said.

Kisaakye wasn’t even satisfied with the Supreme court decision on the interest award.

“Even with the reduction of the rate of interest to six per cent per annum, it is disputable that Goodman agencies would have earned the Shs 7.8 billion they will be receiving as interest as per the majority ruling,” she ruled.

Kisaakye also found it difficult to justify Goodman’s windfall, because there was no independent evidence on record, such as bank statements, payment vouchers or cheques from clients to support the claim of lost earnings.

“Courts of law should also not lose sight of the fact that the resources in the consolidated fund do not belong to the attorney general. Rather, these resources are collected from [and belong to] numerous taxpayers who may either be holding formal employment or be engaged in business,” Kisaakye observed, adding that it is the same fund that the government uses to provide services such as education, health and infrastructure.

Kisaakye concluded: “The consolidated fund should, therefore, only be debited to compensate an aggrieved party, only in deserving cases, and only to the level they would have been in if the unlawful acts had not taken place.”

Source : The Observer

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