The Supreme Court has ordered renowned businessman Ben Kavuya and his company to pay Alice Okiror, widow of former FUFA treasurer Michael Okiror, Shs 222 million in general and special damages over a loan dispute that has dragged on for sixteen years.
The five Supreme Court judges, Justices Percy Night Tuhaise, Monica Mugenyi, Stephen Musoke, Christopher Madrama and Catherine Bamugemereire, delivered a majority decision dismissing Kavuya’s appeal.
The dispute started in 2008, when Alice Okiror and her husband Michael Okiror, who was still alive then, went to Kavuya’s moneylending firm, Global Capital Save, looking for money.
They borrowed Shs 53 million, and to secure the loan, they handed over a land title belonging to their daughter, Aguti Rose, for a property in Kireka. Alice also staked her land in Lukuli, Makindye. Kavuya’s company kept both titles.
The loan was supposed to be paid back within about ten months, from February to December 2008. Alice and his husband kept paying money to Kavuya’s company, and by the time they stopped, they had handed over Shs 230 million in total, far more than the 53 million they originally borrowed.
When they went back to collect their land titles, Kavuya refused to release them, insisting there was still money outstanding.
This is where the story took a twist familiar to many borrowers in Uganda, particularly those who borrow from moneylenders.
Usually, moneylenders find reasons to hold onto security like a land title, a building, or a vehicle a little longer, arguing that the interest piled up in ways the borrower never agreed to or understood.
Frustrated, the Okirors sued Global Capital Save and Kavuya in 2010.
They wanted the court to declare that they had fully paid off the Shs 53 million loan with interest, to declare the interest charged illegal and unfair, to get their titles back, and to be paid back the money they had overpaid, which was Shs 192.5 million, plus damages.
But Kavuya said he had actually lent the Okirors Shs 350 million, not Shs 53 million, and that only Shs 230 million of that had been paid back, leaving Shs120 million still owed. He also denied ever receiving Aguti Rose’s title.
Justice Hellen Obura, who handled the case, ruled in favour of the Okirors.
She found that the mortgage document was not properly signed by the company as required by law, was never properly witnessed, and had no written consent from Alice’s husband, Michael, which the law demands before family land can be mortgaged.
She also discovered that Kavuya’s company had been charging interest of 12% every month, which translates to 144% a year.
Justice Obura ruled this was illegal, harsh, and unconscionable, and declared the loan fully paid. She ordered Kavuya to return the land title for the Lukuli land.
However, Kavuya took the matter to the Court of Appeal where his lawyers, Peter Nkurunziza, Joseph Kyazze and Brian Rubihayo, argued the mortgage was properly executed.
They said Kavuya himself should never have been dragged into the case personally since he signed as a company director, not in his own name.
Alice Okiror’s lawyer, Gilbert Nuwagaba, argued that Kavuya’s own witness admitted at trial that he did not know the man whose signature was supposed to have witnessed the mortgage, and that the company had failed to prove it ever lent the disputed Shs 350 million.
The Court of Appeal agreed with the Okirors, forcing Kavuya to appeal to the Supreme Court.
After scrutinising the case and the rulings, the Supreme Court, too, sided with the Okirors on almost every point.
On the missing consent from Alice’s husband, the judges said Kavuya’s side never showed any evidence that this consent existed. They said Kavuya’s side had every chance during trial to prove otherwise and simply did not take it.
On the high interest rate, the court agreed that it was unreasonable, with the judges noting that Uganda’s Moneylenders Act treats any interest above 24% a year as excessive unless the lender proves otherwise.
In the end, Kavuya’s appeal was dismissed by a 4- 1 majority, with Justice Mugenyi dissenting on the mortgage execution question and Justice Bamugemereire dissenting on the special damages, arguing they should not have been awarded at all.
The majority ordered Kavuya to pay the damages with interest and hand back Alice Okiror’s title.
For many borrowers across Uganda who feel trapped by lenders who will not let go of a title even after a loan is cleared, the Supreme Court ruling is a reminder that the law does eventually catch up, even if it takes years.
