Pastor Jackson Ssenyonga of Christian Life Church (CLC) has won a Shs5b court dispute in which a city businessman had sued him over breach of contract.
In a ruling dated September 12, Commercial Court Judge, Jeanne Rwakakooko instead ordered businessman Nathan Bisaso to pay Ssenyonga and his wife, Eva Ssenyonga, Shs1b in damages.
“I find that the plaintiff’s Shs5b claim fails because it is based on illegal loan transactions,” the Judge ruled. Rwakakooko also ordered Bisaso to pay costs of the suit.
Bisaso had sued Ssenyonga and his wife, claiming that he lent them Shs1.4b, which they had failed to pay. The businessman therefore demanded sh5b in accumulated interest.
However, Ssenyonga produced evidence in court showing that he had paid sh2.4b to Bisaso. Subsequently, the judge said it was unfair for the Pastor to pay Shs2.4b when he received Shs1.4b. The judge said the loan transaction was illegal.
“I grant the defendants general damages covering the difference between the loan they were given and the extra amounts which were paid to the plaintiff on the basis of an illegal transaction,” said justice Rwakakooko.
The judge added, “The Shs1b award is fair considering that the plaintiff gained more in profit on the basis of illegal transactions.”
Rwakakooko declared the agreement executed between Ssenyonga and Bisaso on June 2, 2014, and September 9, 2016, illegal, saying it was not enforceable.
Rwakakooko, therefore, ordered Bisaso to immediately return to the pastor all cheques and certificates of title with respect to land comprised in Kibuga block 28, plots 403, 408, 409,686,688 and 689 at Makerere Kavule.
The Judge noted that Bisaso gained a lot of money from issuing out loans at unacceptable interest rates without undertaking the required procedures under the law.
Rwakakooko pointed out that one of the reasons Parliament introduced the regulation of money lenders was precisely to prevent this kind of situation from happening, where shoddy questionable business practices are allowed to thrive.
The Judge said Bisaso claimed the agreement presented to court showing the transaction between him and Ssenyonga was forged, but he did not adduce documentary evidence by producing the alleged genuine agreement in respect to goods that he sold to Ssenyonga.
The Judge said Ssenyonga presented evidence that between January 9, 2014 and April 22, 2016, several payments were made to Bisaso.
Court heard that the debt accumulated to Shs12b with interest, but Ssenyonga pleaded with the businessman to reduce it. However, Bisaso threatened to bank all the cheques which had been issued to him unless Ssenyonga agreed to pay Shs5.3b. However, after Ssenyonga defaulted on payment, Bisaso sued him.
How it started
Bisaso contended that between 2013 and 2016, he entered into a contract to supply Ssenyonga and his wife goods. According to Bisaso, he supplied the goods to the defendants on credit and late payment for the goods carried interest.
Court documents indicate that the interest rate with respect to the first initial transaction was at 10% per annum.
Bisaso told court that in September 2016, the couple drafted an agreement and promised to pay the outstanding debt for the supplied goods, but only paid Shs270m, leaving a balance of Shs5b.
However, Pastor Ssenyonga claimed that the initial transaction was not a contract for goods but a loan agreement disguised as a contract for sale of goods on credit.
He argued that it was disguised because Bisaso did not have a money lending license.
Ssenyonga said in 2013, Bisaso advanced him a loan of Shs800m disguised as a sale of goods contract at a compounding interest rate of 20% per month.
Moments later, Ssenyonga borrowed additional sh605m, bringing the total amount to sh1.4b.
This resulted into execution of an agreement titled “agreement for a short-term loan” on June 2, 2014.
But Bisaso argued that the agreement was forged, and he vowed to produce the original document. However, he failed to produce the original document in court.
Ssenyonga stated that as security for the debt, he deposited photocopies of titles for his land at Naguru hill, Nalubaale street, Masaka, among others.
Source: New Vision