Application for judicial review in favour of bank officials who were interdicted following directives from the INSPECTOR General of Government
THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
MISC CAUSE NO. 303 OF 2013
IN THE MATTER OF AN APPLICATION FOR JUDICIAL REVIEW
1. OJANGOLE PATRICIA
2. ANDREW MULUBYA
3. DANIEL KAGWA ::::::::::::::::::::::::: APPLICANTS
4. DR. SAMUEL SEJJAKA
5. UGANDA DEVELOPMENT BANK
ATTORNEY GENERAL :::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT
The five applicants to wit; Patricia Ojangole, Andrew Mulubya, Daniel Kagwa, Dr. Samuel Sejjaka and Uganda Development Bank Limited through their lawyers M/s Ligomarc Advocates filed this application for Judicial Review by way of Notice of Motion under Articles 28, 42, 44 & 50 of the Constitution, S. 38 of Judicature Act, S. 98 of the Civil Procedure Act and rules 3(2) and 6 of Judicature (Judicial Review) Rules 2009 moving this court for orders declaring that:-
The Inspector of Government (IGG) misused its discretionary powers when it directed the 5th applicant’s Board of Directors, whose Chairman is the 4th applicant to suspend the 1st , 2nd and 3rd applicant from their positions as employees of the 5th applicant.
The IGG acted illegally, high handedly, irrationally and unreasonably when it directed the 5th applicants Board of Directors to suspend the 1st ,2nd, and 3rd applicants from their employment with the 5th applicant without affording them a fair hearing.
The applicants further sought for orders of this court issuing:-
(2) An order of Certiorari to move to this court to set aside, quash the IGG directive issued on 30th July 2013 directing the 4th applicant to suspend the 1st, 2nd and 3rd applicant from their employment with the 5th applicant.
(3) An injunction restraining the IGG or any of the respondent’s agents from making any further orders directives for the interdiction suspension, termination or removal by any other means the 1st to the 4th applicant from their respective employment and positions with the 5th applicant on the premise of the impugned investigation.
(4) An order awarding general damages to the applicants for the anguish inconvenience, injury, suffered to the 5th applicant’s business and the good will due to the respondent’s illegal actions against the applicants.
The grounds of the application are that:-
The investigations conducted by the IGG out of which the impugned directives has been made were conducted in an oppressive, irrational, vindictive and biased manner.
The IGG’s directive to suspend the entire Senior Management team of a financial institution will result in significant disruption of the Bank’s operations.
The implementation of the IGG’s directive does not serve the general interest of the public.
Whether in the circumstances of this case the applicants are entitled to the remedies sought.
Civil procedure- Judicature Act- whether by bringing this application under section
Corporate governance – whether the IGG has powers to direct the board of Directors to discipline and/or interdict her staff.
Employment law – whether an employ who is under investigations has a right to a fair treatment during the process of investigations.
Judicial review- grounds for grant of remedies in an application for judicial review
Principles of natural justice- whether the principles of natural justice must be applied in all situations
Learned counsel for the applicant submitted to the contrary saying that this application is properly before court and I agree. By virtue of S.3 of the Judicature (Amendment) Act 2002, the original S. 38 of the Judicature Act Cap 13 was substituted with a new S. 38. The said S.3 states that “The Statute is amended by substituting for S. 38 the following new section – “Judicial Review”. In my view if an update is done on the old section by deleting it and replacing it by the new S. 38, that section remains the same. Therefore this application is properly before court.
In order for one to succeed in an application for Judicial Review the applicant has to show that the decision or act complained of is tainted with illegality, irrationality and procedural impropriety. Illegality is when the decision making authority commits an error of law in the process of taking the decision or making the act, the subject of the complaint. Acting without jurisdiction or ultravires or contrary to the provisions of a law or its principles are instances of illegality. Irrationality is when there is such gross unreasonableness in the decision taken or act done that no reasonable authority, addressing itself to the facts and the law before it, would have made such a decision. Such a decision is usually in defiance of logic and acceptable moral standards. Procedural impropriety is when there is a failure to act fairly on the part of the decision making authority in the process of taking a decision. The unfairness may be in the non-observance of the rules of natural justice or to act with procedural unfairness towards one to be affected by the decision. It may also involve failure to adhere and observe procedural rules expressly laid down in a statute or legislative instrument by which such authority exercises jurisdiction to make a decision.
Learned counsel for the applicants submitted to the countrary and I agree. Even in cases of criminal investigations, principles of fairness and natural justice must be applied. The argument that the IGG or any criminal investigation agency can conduct partial or weak investigations merely because the victim will be afforded a hearing during the criminal trial lacks merit. Investigation agencies must conduct their investigations with fairness and impartiality. No one has a right to prosecute people any how because they will defend themselves in the trial. This is more so when the alleged offences arise from employer’s discretion when managing an institution or when it relates to an employee. Therefore while the 1st to the 3rd applicants may be heard in their defence to criminal charges against them in a criminal court, the right to a fair hearing is sacrosanct especially for an employee prior to his/her Employer’s decision to invoke disciplinary penalties which is enshrined in the employment law and not criminal law.
I agree with the submissions by learned counsel for the applicants that had the applicants been given a proper chance to explain themselves in the context of fair investigation they would have brought forth the scheme by disgruntled members of staff. For example the unrebutted Mulubya’s affidavit revelations in paragraphs 29-32 that the complainant was involved in a scheme to steal confidential information which is being used against the 5th applicant would have come out.
It is now settled that it is a fundamental principle of justice and procedural fairness that no person is to be condemned unless that person has been given prior notice of the allegations made against him or her, and a fair opportunity to be heard.
From the above celebrated pronouncements it is apparent that the rule of natural justice obliges an adjudicator faced with the task of making a choice between two opposing stories to listen to both sides. He should not base his decision only on hearing one side. He should give equal opportunity to both parties to present their cases or divergent view points. The scales should be held evenly between the parties. It does not matter that the result would be the same.
In the instant case I am constraint to find that the applicants were not accorded a fair hearing during the IGG investigations of this case. Even in matters of criminal investigations, whether or not they lead to administrative sanctions, rules of natural justice must be observed and the affected parties must be accorded a fair hearing to state their side of the story in an investigation conducted free of bias.
The actions of the IGG in this case amounted to procedural impropriety. The applicants were given the impression that what was being investigated was different from what they were arrested for, i.e victimization.
On whether the IGG acted in an irrational manner in making the decisions in this case, the submission by leaned counsel for the applicants is spot on. It is apparent that the IGG completely ignored the evidence on allegations of fraud involving 54 Billion shillings and opted to swiftly and vigorously pursue the case of victimization of a whistleblower.
As can be seen in paragraph 33 and annex ‘J’ to Mulubya’s affidavit as well as paragraph 43 and annexture ‘N’ to Ojangole’s affidavit, lines of credits and trainings that had been opened in favor of the Bank were immediately cancelled and/or withheld upon hearing of the applicants arraignment. A bank’s business is premised on stability and credibility.
By insisting on the implementation of the directive which attracted negative publicity to the Bank’s executive, the IGG injured the Bank’s and public interest which was irrational.
I also agree with the submission by learned counsel for the applicants that the IGG’s directive to the 4th and 5th applicants were illegal and an abuse of its powers as it seeks to exert influence on the board to exercise its discretionary powers in disciplinary matters in the IGG’s favor. The 5th applicant is a duly incorporated company and its Human Resource Manual (annexture ‘M’ to Mr. Sejjaka’s affidavit) is implemented by the Board of Directors which is mandated to manage the institution.
Clearly the directive by the IGG was ultra vires the above provision as there was no recommendation for the suspension from the bodies or persons envisaged in the manual of both the corporate 5th applicant and the 4th applicant.
The IGG was in essence exerting pressure and influence on the 4th applicant and the Board of Directors of the 5th applicant to exercise their discretionary powers through threats to take actions against them if they did not comply with her directive. Obviously such threats are high-handed because disciplinary action against the employees of the 5th applicant is the preserve of the board. In modern corporate governance such arrangement ought to be respected.
In view of the procedural defects, irrationalities and illegalities, outlined above, the IGG’s directive against the applicants could not be allowed to stand. The same was quashed by way of an order of certiorari. an injunction issued restraining the IGG and any of the respondents’ agents from making any further orders or directives for the interdiction, suspension, termination of the 1st to the 4th applicant and/or any director or employee of the 5th applicant from their respective employment and positions on the premise of the impugned investigations.
Consequently this application for judicial review was granted with costs.