The court entered judgment in favour of DFCU Bank, awarding the outstanding debt, special damages, punitive damages, interest and costs.
The High Court’s Commercial Division in Kampala has ordered a woman to pay DFCU Bank more than sh165m in principal debt, consequential and punitive damages after finding that she fraudulently presented an impostor as her husband to secure a sh20m loan.
Justice Stephen Mubiru ruled that Dr. Elizabeth Nabatanzi Lugudde deliberately misrepresented the identity of the registered owner of land she offered as security for the overdraft facility, leaving the bank exposed to costly litigation after the transaction was challenged. Nabatanzi is an ex-presidential aid who was dismissed by President Museveni in 2008 over alleged indiscipline.
In a judgment delivered on October 27, 2026, the court ordered Lugudde to pay sh83.8m in outstanding principal debt, sh71.86m in special damages, sh10m in punitive damages and costs of the suit.
The judge further awarded interest at 25% per annum on the outstanding debt from July 1, 2021, and on the special damages from May 23, 2012, until full payment. The punitive damages will attract interest at six per cent per annum from the date of judgment.
The dispute arose from an overdraft facility of sh20m extended to Lugudde on September 25, 2008, for her business of transporting merchandise from South Sudan.
According to court records, Lugudde presented a man she identified as her husband, Samwiri Lugudde Kanyike Katwe, and provided a certificate of title for land at Lungujja, Kampala, registered in his name, as security for the loan.
However, the court found that the man who appeared at the bank was actually her brother-in-law, Moses Kamya, also known as Samuel Lugudde Kanyike, and not the registered proprietor of the land.
The bank subsequently discovered that the genuine landowner had not consented to the mortgage, rendering the security invalid.
Lugudde admitted receiving the overdraft but denied committing fraud, arguing that her husband had consented to the transaction and personally handed her the land title. She also told court that her business truck was involved in an accident along the Gulu Highway while transporting garden produce to South Sudan, disrupting the business and contributing to her failure to repay the loan.
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However, Justice Mubiru rejected her defence, holding that even if her husband had consented to the use of an impostor, such consent did not excuse the deception practised against the bank.
“The defendant sets up an absurd defence: that she substituted another man to act as her husband with her husband’s consent,” the judge observed, adding that the admission established fraudulent misrepresentation.
The court found that the bank had relied on the false representation to extend the facility and accept the land title as security.
Bank incurs sh71.8m in litigation costs
After Lugudde defaulted on the loan, DFCU Bank moved to recover the money by advertising the land for public auction. The property was sold to Peter Ivor Page and Beatrice Loiza Nakaye Page for sh26m on March 25, 2010.
The sale was subsequently challenged by the registered proprietor, who sued the bank and Lugudde in 2011, seeking its nullification.
The auction purchasers also sued the bank after their purchase was affected by the dispute.
According to the judgment, the bank settled the registered proprietor’s claim for sh11.5m, comprising sh7.5m in general damages and sh4m in costs.
It also settled the purchasers’ claim for sh50m, including a refund of the purchase price, damages and costs. The bank further incurred sh1.5m in bailiff’s fees and legal fees of sh2.95m and sh5.9m in the two cases.
Justice Mubiru held that these expenses were a direct and foreseeable consequence of Lugudde’s fraudulent misrepresentation and were recoverable as special damages.
The judge rejected Lugudde’s allegation that the bank had connived with her husband to inflate the settlement costs, finding that she had not provided sufficient evidence to support the claim.
Although the bank initially sought sh97.4m in special damages, the court identified an amount that should not have been included in that claim and awarded sh71.86m.
The court also rejected the argument that the truck accident excused Lugudde from repaying the loan, ruling that the destruction of business assets was a commercial risk that did not extinguish her contractual obligation.
Court awards sh10m punitive damages
In an additional penalty, Justice Mubiru awarded DFCU Bank sh10m in punitive damages, finding that Lugudde’s conduct went beyond an ordinary breach of contract.
The judge said the impersonation was deliberate and calculated to obtain a financial benefit at the bank’s expense, leaving the lender without valid security and exposing it to claims by third parties.
He noted that punitive damages are generally not awarded in breach-of-contract cases unless an independent wrongful act, such as fraud, is also involved.
The court held that the circumstances justified an exemplary award intended to punish the wrongdoing and deter similar conduct.
Lugudde had earlier told court that she and her brother-in-law had been prosecuted over the transaction but were acquitted. However, the judge explained that an acquittal in criminal proceedings did not prevent the court from finding that fraud had been proved in a civil case, where the applicable standard of proof differs.
The court entered judgment in favour of DFCU Bank, awarding the outstanding debt, special damages, punitive damages, interest and costs.