The High Court Commercial Division has ordered Dr Elizabeth Nabatanzi Lugudde, a former presidential aide, to pay DFCU Bank Shs 165.7 million after finding that she fraudulently obtained a Shs 20 million loan.
In his ruling, Justice Stephen Mubiru held that Nabatanzi used an impostor to pose as her husband, Samwiri Lugudde Kanyike Katwe, to secure a Shs 20 million overdraft in 2008.
According to court documents, Nabatanzi and the man she presented as her husband obtained the overdraft to finance the transportation of merchandise to South Sudan. As security for the loan, Nabatanzi handed over a certificate of title for land in Lungujja registered in the name of Samwiri Lugudde Kanyike Katwe.
However, after she failed to repay the loan, following an accident involving the truck transporting the merchandise to South Sudan in Gulu, the bank moved to sell the mortgaged land. The property was eventually sold to Peter Ivor Page and Beatrice Loiza Nakaye Page for Shs 26 million.
It was during the subsequent dispute that it emerged that the man Nabatanzi had presented as her husband was actually her brother-in-law, Moses Kamya. Lugudde Kanyike subsequently sued DFCU Bank, disputing that he had ever consented to mortgaging his land.
Before the case could be determined, the bank opted for an out-of-court settlement. It compensated Samwiri Lugudde Kanyike with Shs 11.5 million in general damages. The bank also reached a settlement with the Pages, agreeing to pay them Shs 50 million in damages.
Including its own legal expenses, the bank’s total settlement costs amounted to Shs 71.8 million.
In its subsequent suit against Nabatanzi, the bank sought to recover the settlement costs as well as the outstanding loan, which had accumulated to Shs 83 million from the original Shs 20 million.
In her defence, Nabatanzi admitted that she had presented another person in place of her husband. However, she argued that she had done so with her husband’s knowledge and consent.
In his ruling, Justice Mubiru rejected her defence, observing that even if her husband had consented to the arrangement, presenting an impostor to the bank amounted to fraud.
“The defendant’s defence hinges on the assertion that her husband Mr. Samwiri Lugudde Kanyike Katwe consented to the transaction and personally handed over the title; and she sets up an absurd defence: that she substituted another man to act as her husband with her husband’s consent,” the judge observed.
“This admission alone conclusively establishes a fraudulent misrepresentation. By presenting an impostor to execute legal banking documents, the defendant engaged in deliberate deception…”
The judge further noted that Nabatanzi could not have mistaken her brother-in-law, Moses Kamya, for her husband.
“Thus, the representation that the man accompanying the defendant was her husband was factually untrue. She could not have believed that Mr. Samuel Lugudde Kanyike, her brother-in-law, was her husband… The defendant presented this impostor as her husband to the bank. This satisfies the element that the representation was made by a person who knew it was untrue or did not believe it to be true,” he ruled.
Justice Mubiru consequently ordered Nabatanzi to pay the bank Shs 83.8 million, representing the accumulated loan, with interest at 25 per cent from 2021. He also ordered her to reimburse the bank Shs 71 million spent on legal fees and settlements arising from the disputed sale of the mortgaged land.
The judge further awarded the bank Shs 10 million in punitive damages and ordered Nabatanzi to pay the costs of the suit.
English 