The High Court in Kampala has ordered Stanley Hotel Ltd, Trading as Forest Mall to pay UGX2bn to Select Garment over eviction gone bad.

Businessman Stanislas Isiag is the proprietor of the mall located in upscale suburb of Kampala.

The Court presided over by High Court judge Patience Rubagumya delivered the verdict in Kampala on Wednesday, October 30, 2024 after 11 years of court battle.

Billy Ahimbisibwe, the proprietor of select Garment filed the suit against Forest Mall Boss for breach of tenancy agreement.

He also demanded for declarations that he was not indebted to Forest Mall in rental arrears as claimed or at all.

He also accused Forest Mall boss of breached of Tenancy/Lease Agreement and demanded for general damages, exemplary/punitive/aggravated damages, special damages, 20 interest, and costs of the suit.

The suit was premised on the background that; Select Garments and the Stanley Hotel aka Forest Mall executed a Tenancy Agreement wherein Forest Mall leased to Select Garments part of the 1st floor of its property known as Forest Mall,Lugogo covering an area of 348 square meters, with effect from 1st December, 2010 at a monthly rent of USD 22 per square meter and a service charge of USD 1,044 per month.

The said tenancy was for six years. Under the Agreement, Select Garments was to receive the premises in a shell form.

Upon taking possession of the premises, Select Garments carried out extensive and expensive high level corporate branding and installations necessary to operate a high end enterprise.

By 10th October, 2012 Select Garments was in rental arrears and Forest Mall instituted Civil Suit No.451 of 2012 seeking to recover the same.

A Default Judgment was entered against Select Garments and a warrant of execution was granted.

However, before execution could commence, the parties entered into a Consent Agreement wherein Select Garments was to pay Forest Mall USD 50,000 in cash in full settlement of all the rent arrears up to 31st December, 2012, which it did.

“The parties also agreed that with effect from 1st January, 2013 the Plaintiff was to pay the Defendant a flat rate of USD 4,000 per month which it did but on 26th May, 2014 the Plaintiff was served with an eviction/demand notice claiming rent arrears of USD 293,070 to be paid within 7 days,” the judgment noted.

“To that, the Plaintiff instituted the current suit contesting the demand notice and the intended eviction on grounds that it was not in arrears since it fully paid up its rent as agreed until May, 2014 when it was evicted/blocked from accessing the premises.”

Select Garments also averred that some of its properties were confiscated by Forest Mall officials and all the movable items seized by the bailiffs Mr. Patrick Talenga of Marshall Agents Auctioneers & Court Bailiffs.

Select Garments denied all the allegations and filed Civil Suit No.451 of 2012 whose ruling was delivered Wednesday.

“In conclusion, the Plaintiff is hereby awarded special damages of USD 131,257 (United States Dollars One Hundred Thirty One Thousand Two Hundred Fifty Seven Only) comprising of USD 123,601 for the fittings and fixtures and USD 7,656 being the security deposit fee and UGX 99,320,856/= (Uganda Shillings Ninety Nine Million Three Hundred Twenty Thousand Eight Hundred Fifty Six Only) comprising of UGX 52,800,000/= for accommodation and locally procured materials and UGX 46,520,856 for the stock that was confiscated by the Defendant,  the ruling stated.

Court further awarded interestat the rate of 20% per 10 annum from the date of filing the suit until payment in full.

“Interest is awarded on the sums at the rate of 6% per annum from the date of Judgment until payment in full. Costs of the suit are awarded to the Plaintiff. The Counterclaim fails,” Judge Rubagumya concluded.

“I won the matter 11 years down the road, judgment has come in our favour. The man illegally stopped our business. We were not indebted to him as he claimed. He now has to make good by sweating over Ugx 2B,” Ahimbisibwe said after the ruling.

Below is the full ruling:

Signed Judgment – SELECT GARMENTS VS OLD STANLEY H_241031_123613 (1) (1)

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

CIVIL SUIT NO. 674 OF 2014

SELECT GARMENTS LTD :::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF

10                                     VERSUS

OLD STANLEY HOTEL LTD :::::::::::::::::::::::::::::::::::::::::::: DEFENDANT

BEFORE:  HON. LADY JUSTICE PATIENCE T.E. RUBAGUMYA

JUDGMENT

Introduction

The Plaintiff filed this suit against the Defendant for declarations that; the Plaintiff is not indebted to the Defendant in rental arrears as claimed or at all, the Defendant breached its Tenancy/Lease Agreement with the Plaintiff, the Defendant is liable for misrepresentation, an order for general damages, exemplary/punitive/aggravated damages, special damages, 20 interest, and costs of the suit.

Background

This suit is premised on the background that; the Plaintiff and the Defendant executed a Tenancy Agreement wherein the Defendant leased to the Plaintiff part of the 1^st floor of its property known as Forest Mall,

25 Lugogo covering an area of 348 square meters, with effect from 1^st December, 2010 at a monthly rent of USD 22 per square meter and a service charge of USD 1,044 per month. The said tenancy was for six years. Under the Agreement, the Plaintiff was to receive the premises in a shell form. Upon taking possession of the premises, the Plaintiff carried out extensive and expensive high level corporate branding and installations necessary to operate a high end enterprise.

By 10^th October, 2012 the Plaintiff was in rental arrears and the Defendant instituted Civil Suit No.451 of 2012 seeking to recover the same. A Default

10 Judgment was entered against the Plaintiff and a warrant of execution was granted however, before execution could commence, the parties entered into a Consent Agreement wherein the Plaintiff was to pay the Defendant USD 50,000 in cash in full settlement of all the rent arrears up to 31^st December, 2012, which it did.

15 The parties also agreed that with effect from 1^st January, 2013 the Plaintiff was to pay the Defendant a flat rate of USD 4,000 per month which it did but on 26^th May, 2014 the Plaintiff was served with an eviction/demand notice claiming rent arrears of USD 293,070 to be paid within 7 days. To that, the Plaintiff instituted the current suit contesting the demand notice

20 and the intended eviction on grounds that it was not in arrears since it fully paid up its rent as agreed until May, 2014 when it was evicted/blocked from accessing the premises.

The Plaintiff also averred that some of its properties were confiscated by the Defendant and all the movable items seized by Mr. Patrick Talenga t/a 25 Marshall Agents Auctioneers & Court Bailiffs.

In its amended written statement of defence and counterclaim, the Defendant/Counterclaimant denied having breached the Tenancy Agreement and revised the rent so that the Plaintiff/Counter Defendant pays a flat rate of USD 4,000 per month. The Defendant/Counterclaimant 30 further contended that the Plaintiff/Counter Defendant has never paid the decretal sum in Civil Suit No.451 of 2012 to date. That it is the Plaintiff/Counter Defendant who breached the Tenancy Agreement when it failed to pay; the rent three months in advance as was agreed, the full amount of rent, the service charge and VAT of 18% on the rent as well as failing to clear the rent arrears before vacating the premises.

10 The Defendant/Counterclaimant now seeks a declaration that the Plaintiff/Counter Defendant is indebted to the tune of USD 172,894 being the rental arrears for the period from January, 2013 to October, 2014, general damages, interest, costs of the suit and any remedy that the Court may deem necessary.

15 In reply to the Counterclaim; the Plaintiff/Counter Defendant reiterated its previous pleadings regarding the modification of the rent payable and further stated that it paid the agreed revised rent in full up to May, 2014 which the Defendant/Counterclaimant duly acknowledged. That the

Plaintiff/Counter Defendant did not pay the rent from June, 2014 to

20 October, 2014 because the Defendant/Counterclaimant had locked up the premises and prevented the Plaintiff/Counter Defendant from utilizing the same until it eventually took over in October, 2014 and therefore, the Plaintiff/Counter Defendant is not in breach of the Tenancy Agreement.

Representation

25 The Plaintiff was represented by Learned Counsel Dr. Benson Tusasirwe of M/s Tusasirwe& Co. Advocates while the Defendant was represented by Learned Counsel Richard Omongole of M/s Omongole& Co.

The Hearing

At the hearing, the suit proceeded by way of witness statements. Both parties had one witness each, that is; Mr. Robert Billy Ahimbisibwe (PW1), for the Plaintiff and Mr. StanislasIsiagi (DW1) for the Defendant. All the witnesses were cross-examined and re-examined accordingly. The parties

10 also adduced documentary evidence contained in their respective trial bundles.

Both Counsel were directed to file their written submissions which they did, and the same have been considered by the Court. I thank both Counsel for their helpful submissions.

15 Issues for Determination

1. Whether either the Plaintiff or the Defendant breached the Tenancy Agreement between 2013 and 2014?
2. Whether the Defendant revised the Plaintiff’s monthly rent from USD 7,656 to USD 4,000?

20 3.Whether the Plaintiff is indebted to the Defendant in the sum of USD 172,894 in rent arrears for the period from 2013 to 2014?

4.What remedies are available to the parties?

Before I delve into the merits of this suit, Counsel for the Plaintiff raised a preliminary objection in his submissions that the Defendant filed its

25 written statement of defence and counterclaim out of time and without leave of Court hence the same should be struck out.

It is now trite that a trial Court has the discretion to dispose of a preliminary point either at or after the hearing depending on the circumstances of the case. (See: Order 6 rule 28 of the Civil Procedure RulesSI 71-1 and the case of Uganda Telecom Ltd Vs ZTE Corporation SCCA No.3 of 2017).

I have perused the record and established that on 17^th August, 2016, Counsel for the Plaintiff raised the same point of law before Hon. Lady

Justice Elizabeth Jane Alividza. The Learned Lady Justice Alividza

10 overruled the point of law holding that since the Plaintiff had amended its plaint, then the Defendant also had a right to amend its written statement of defence. The Court went on to hold that since the Plaintiff had been given an opportunity to amend its plaint, then fairness had to apply on both sides.

15 I have no reason to depart from the above ruling and in the premises, this objection is overruled. I shall now proceed to resolve the suit on its merits.

Issue No 1: Whether either the Plaintiff or the Defendant breached theTenancy Agreement between 2013 and 2014?

Plaintiff’s submissions

20 Counsel for the Plaintiff first relied on the case of Arch. Joel Katerega& Another Vs Uganda Post Ltd T/A Posta Uganda HCCS No. 20 of 2010, wherein Hon. Lady Justice HellenObura (as she then was) stated that:

“A breach of contract occurs when one or both parties fail to fulfil the obligations imposed by the terms of the contract.”

25 Counsel then submitted that though the “Heads of Terms” and the Lease Agreement PEX 1 and PEX 2 were undated, the parties based on them to establish a tenant-landlord relationship, hence there was a valid Tenancy

Agreement between the parties. He added that from 2013 to 2014, the binding terms of the said Tenancy Agreement were not restricted to the provisions of the two documents above, as it can be inferred from both the documents and the course of dealing between the parties, during which, the tenancy terms were varied. Counsel referred to Section 10(2) of the

Contracts Act, 2010 (now Section 9(2) of Cap. 284) which provides that

10 contracts can either be oral or written, partly oral and partly written or may be implied from the parties’ conduct.  Counsel also referred to Section 52 of the Contracts Act (now Section 51 of Cap. 284).

Relating to the instant case, Counsel for the Plaintiff submitted that there was a variation of the contract and that the Plaintiff duly performed its

15 obligations under the varied contract. That whereas the parole evidence rule contained in Section 91 of the Evidence Act, Cap. 6 (now Cap. 8), is to the effect that when the terms of a contract have been reduced into writing, no evidence shall be given in proof of the terms of the contract except the document itself, the rule is irrelevant to the instant case as the

20 only way to find that there was a variation is to accept the fact that the contract was not limited to the document alone.

Counsel also submitted that even if it is found that the contract was not varied because there is no formal agreement as was required by clause 43 of the Tenancy Agreement, the Defendant waived its right to claim the

25 original rent of USD 7,656 plus service fees and VAT when it settled for USD 4,000 per month which the Plaintiff duly paid as per PEX 15, the amended record of payments of rent from January, 2013 to May, 2014. To support the above submissions, Counsel referred to the definition of waiver as stated in the case of Agri-Industrial Management Agency Ltd Vs

30 Kayonza Growers Tea Factory Ltd &Igara Growers Tea Factory

Limited, HCCS No.819 of 2004, wherein Hon. Justice Geoffrey Kiryabwire (as he then was) adopted the definition of waiver set out in Halsbury’s Laws of England, 4^th Edition Vol.9 (g) at paragraph 1025, which stipulates that:

“Waiver in contract is most commonly used to describe the process whereby one party unequivocally, but without consideration, grants a

10 concession or forbearance to the other party by not insisting upon the

precise mode of performance provided for in the contract, whether before or after any breach of a term waived.”

In further support, Counsel quoted the case of Kammins Ballrooms Co.

Ltd Vs Zenith Investments (Torquay) Ltd [1970] 2 All E.R. 871, wherein

15 Court explained that all that the Court is required to consider in deciding whether or not to give effect to a waiver is; whether the Defendant, in abandoning his right, had knowledge of the “facts” relevant to the decision. That it is immaterial that the Defendant “forgot” to invoke its rights at the appropriate time since it is not to prove that the Defendant was aware of

20 the legal consequences of not asserting its rights. Counsel further submitted that the operation of the doctrine of waiver has been recognized for over a century in landlord-tenant relations and that the basis of the above principle is the operation of promissory estoppel which is embedded in Section 114 of the Evidence Act.

25 To explain the waiver in the instant case, Counsel referred to PW1’s evidence-in-chief wherein PW1 stated that:

“…when it became clear that the rent of USD 7,656 was untenable, owing to the state of the property and the general economic situation in 2012, the Defendant agreed to reduce the rent to USD 4,000 with

30   effect from January, 2013 because it was clear that without doing so, the Plaintiff had no option but to give up the tenancy. That from January, 2013 until May, 2014 the Plaintiff never paid any rent above USD 4,000 for any month and the Defendant invariably accepted the same and indicated the balance as ‘nil’ and never demanded any balances until 2014 when it did so out of the blue.”

10 Counsel relied on PEX 15 the amended record of payments of the current rent, with receipts for both rent arrears and argued that the said receipts issued by the Defendant show beyond any doubt that the Defendant waived its right to claim the rent provided in the written contract. That even if it was to be argued that the contract could only be varied in writing,

15 the receipts are documentary evidence of the variation and that clause 43 of the Tenancy Agreement did not prescribe the form the ‘written’ variation had to take.

Furthermore, Counsel referred to paragraph 8 of the amended plaint and paragraph 28 ofPW1’s witness statement, which list the particulars of

20 breach and misrepresentation alleged by the Plaintiff to include; failure of the Defendant to complete the mall within two years from 2010 as agreed, the Defendant levying a service charge and service costs twice, the Defendant issuing an eviction/demand notice yet the Plaintiff was paying its rent fully, the Defendant wrongfully evicting the Plaintiff as well as the 25 Defendant confiscating and converting the Plaintiff’s properties.

In conclusion, Counsel prayed to Court to find that the Defendant breached the Tenancy Agreement when it; issued an eviction/demand notice (PEX 17), dated 21^st May, 2014, proceeded to lock the premises, confiscated the Plaintiff’s property and in effect evicted the Plaintiff.

30

Defendant’s submissions

In reply, Counsel for the Defendant contended that it is the Plaintiff that breached the Tenancy Agreements; PEX 1 and PEX 2, the Heads of Terms and the Lease Agreement. That the same were valid documents and not inchoate as alleged by the Plaintiff and were executed by the parties with

10 the understanding that they were binding. That clause 8 of PEX 2, the Tenancy Agreement prohibited the tenant from altering or interfering or making any alteration on any part of the building without the consent of the landlord but to the contrary, the Plaintiff embarked on fitting out colored shelves and mirrors into the rented space and yet no disclosure

15 was done declaring the nature of the modification being done or the costs to be incurred or anything else.

Further, that clause 7 of PEX 1, the Heads of Terms provided that the initial monthly rent payable during the first year of the term of the sublease was to be USD 7,656 payable initially six months and thereafter quarterly

20 in advance. However, that the Plaintiff took possession of the property in December, 2010 and by May, 2021, it had already defaulted on the rent payment and by 31^st August, 2012, the Plaintiff was in rental arrears of USD 117,213.45 and had not paid the signage fee of USD 8,000.

Furthermore, Counsel submitted that much as Counsel for the Plaintiff

25 submitted that the terms in PEX 1 and PEX 2 were varied, no evidence was adduced to prove that the same had been varied as was required under clause 43 of PEX 2. Counsel then quoted the case of MakubuyaEnock Willy T/a PollaplastVsSongdoh Films (U) Ltd &Another Civil Suit No.349 of 2017 wherein it was held that:

“It is a well-established principle in D.S.S Motors Limited VsAfri Tours and Travels Limited and Amin Tejani HCCS No.12 of 2003 that evidence cannot be admitted to add, vary or contradict a written instrument (parole evidence rule). The parole evidence rule has been applied in various cases some of which are L’EstrangeVs F Graucob

10 Ltd [1934] 2 K.B 394 where Scrutton LJ in his lead judgment

underscored the principle that once an agreement is reduced into writing and executed by both parties, the parties are bound and it is wholly immaterial whether the parties read the contents or not. He also noted the exceptions to the rule which would include fraud,

15   duress, illegality, misrepresentation, lack of consideration, and lack of

capacity to execute the contract or mistake.”

Counsel emphasized that any form of variation was to be by a written agreement between the parties and not oral. Counsel also relied on

Sections 91 and 92 of the Evidence Act, Section 66 of the Contracts

20 Act and the case of MujuniRuhembaVsSkanka Jensen (U) Ltd CACA No.56 of 2000.

In summation, Counsel submitted that the Tenancy Agreement provided that the agreed amount was USD 33,508 which was always invoiced to the

Plaintiff on a monthly basis and as such the terms of PEX 1 and PEX 2

25 were not varied at any point of the tenancy relationship. That the variation in the rent payable was a major variation and in the circumstances of the case, it ought to have been put in writing in order to avoid such conflicts and that the Plaintiff used to make part payments of USD 4,000 per month sometimes, or nothing at all which resulted into accumulation of the rent 30 arrears to USD 172,894 between 2013 and 2014.

Concerning the waiver of the right to receive the rent of USD 7,656 as submitted by Counsel for the Plaintiff, Counsel for the Defendant disputed the same contending that the Defendant never at any time accepted USD 4,000 as settlement of the monthly rent, as its Accountant constantly invoiced the Plaintiff the full amount of the rent as evidenced by DEX 15

10 which was inclusive of the service charge and VAT but the Plaintiff stubbornly ignored the invoices. That the same cannot therefore be termed as a waiver of the Defendant’s right yet the Plaintiff breached the Agreement when it failed to pay the agreed amount in the Tenancy Agreement signed in 2010 by both parties.

15 Counsel relied on Section 114 of the Evidence Act regarding the doctrine of estoppel and its effect together with the case of Andrew AkolJachaVs Noah DokaOnzivula HCCA No. 0001 of 2014, where His LordshipStephen Mubiru stated that:

“Lastly, the Court cannot take into account the post-contractual

20 conduct of the parties in order to determine the meaning and effect of

the contract … first whether or not they were intended to be final and the complete agreement between the two parties, in which case the parole evidence rule applies to exclude extrinsic evidence in their interpretation. Then the Court will proceed to give the words contained

25 therein their ordinary meaning in their contractual context, construing

them at the same time to yield a businesslike or commercial sense without resorting to subsequent conduct to determine the terms of the contract.”

To that, Counsel invited this Court not to consider the post-contractual

30 conduct of the parties in determining whether the contractual terms were waived because the said waiver was not expressly agreed upon by both parties. He referred to the case of Yonasani B. KanyomoziVs Motor Mart (U) Ltd SCCA No. 15 of 1995, in which the Supreme Court held that for an act, statement, or other conduct, to be construed in law as a waiver, it must be shown that there was mutual agreement to alter or otherwise affect the legal relationship of the parties. In conclusion, Counsel prayed

10 to Court to find that the monthly rent to be paid as per the Tenancy Agreement was never revised and that therefore, the Plaintiff was in breach.

Plaintiff’s submissions in rejoinder

Counsel for the Plaintiff submitted that whereas Counsel for the Defendant

15 contended that the fittings in the shop were made without the consent of the Defendant, the same issue was never raised during the existence of the tenancy relationship. That the default in the rent payment in the first six months of the tenancy was dealt with in the earlier suit where a Consent Judgment was entered.

20 Counsel further submitted that much as it is true that a party cannot adduce oral evidence to vary the terms of a written contract, the principle is irrelevant to the case at hand since the contract between the Plaintiff and the Defendant was not contained in one deed as is required before the parole evidence rule can be applied. That the course of dealing of the

25 Plaintiff and the Defendant including the revision of the rent as evidenced by the receipts showing payment of USD 4,000 as the rent followed by issuance of a receipt showing “nil” balance and thereafter, the Defendant accepting USD 4,000 per month show that the Defendant is not entitled to the general provisions embedded in Sections 91 and 92 of the

30 Evidence Act.  That the Defendant is estopped from reverting to the original contract having waived its rights thereunder.

Analysis and Determination

I have considered the pleadings of both parties, submissions and evidence adduced to find as follows.

Section 101(1) of the Evidence Act, Cap. 8 provides that whoever desires any Court to give judgment as to any legal right or liability

10 dependent on the existence of facts which he or she asserts must prove that those facts exist. (See also Sections 102, 103 and 104 of the Evidence Act).

Section 9(1) of the Contracts Act, Cap. 284, defines a contract as an agreement made with the free consent of parties with capacity to contract,

15 for a lawful consideration and with a lawful object, with the intention to be legally bound. While relying on Section 91 of the Evidence Act, Hon. Lady Justice C. K. Byamugisha (as she then was) in the case of William KasoziVs DFCU Bank Ltd HCCS No.1326 of 2000, stated that:

“Once a contract is valid, it creates reciprocal rights and obligations

20 between the parties to it. I think it is the law that when a document

containing contractual terms is signed, then in absence of fraud or misrepresentation the party signing it, is bound by its terms.”

As I delve into the analysis of this issue, I am mindful of the fact that it is not the function of the Court to make contracts between the parties but

25 rather to construe the surrounding circumstances so as to effectuate the intention of the parties. (See: Omega Bank PlcVs O.B.C Limited (2005) 8 NWLR (pt.928) 547 and Fina Bank Ltd Vs Spares and Industries Ltd

It is undisputed that both the Plaintiff and the Defendant executed a Tenancy Agreement (PEX 1) and a Lease (Tenancy) Agreement (PEX 2) in 2010 wherein the Defendant leased part of its premises to the Plaintiff for 6 years. According to PEX 2, the Plaintiff took possession of the premises on 1^st November, 2010. The parties are now before this Court alleging 10 breach of the contract against each other from the year 2013 to 2014.

In his submissions, Counsel for the Plaintiff argued that PEX 1 and PEX 2 were inchoate since they were not dated and that though the Plaintiff relied on the same, there were variations of the Agreements which were breached by the Defendant. On the other hand, the Defendant, argued

15 that the Agreements were duly executed and were never varied. For proper resolution of this issue, I shall break it into the following sub issues:

1. Whether there was a valid Lease (Tenancy) Agreement between the Plaintiff and the Defendant?
2. Whether the said Agreement was varied, and?

20 iii.Whether there was breach of the Agreements by either party between 2013 and 2014?

i)Whether there was a valid Lease (Tenancy) Agreement between thePlaintiff and the Defendant?

25 In his submissions, Counsel for the Plaintiff kept on referring to PEX 1 and PEX 2 as undated documents and inchoate however, Counsel for the Defendant maintained that though the Plaintiff refers to PEX 1 and PEX 2 as inchoate documents, the same were executed by the parties with an understanding that they were binding and meant to govern their tenancy

30

The Black’s Law Dictionary, 9^th Edition defines a contract to mean an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law. Section 9(1) of the Contracts Act also defines a contract as an agreement made with the free consent of parties with capacity to contract, for a lawful consideration and 10 with a lawful object, with the intention to be legally bound.

The Supreme Court defined a valid contract in the case of Sharif Osman Vs Haji HarunaMulangwa SCCA No.38 of 1995, to mean one that is sufficient in form and substance so that there is no ground whatsoever for setting it aside between the vendor and purchaser. In the case of

15 Greenboat Entertainment Ltd Vs City Council of Kampala HCCS No.580 of 2003, Court held that:

“In law, when we talk of a contract, we mean an agreement enforceable at law. For a contract to be valid and legally enforceable, there must be: capacity to contract; intention to contract; consensus ad

20 idem; valuable consideration; legality of purpose; and sufficient

certainty of terms. If in a given transaction any of them is missing, it could as well be called something other than a contract.”

From the above authorities, in determining the validity of a contract and whether it is lawfully enforceable, the Court ought to establish that the

25 parties had the capacity and the intention to contract, consensus ad idem, valuable consideration, legality of purpose and sufficient certainty of terms.

On the other hand, an inchoate agreement means a partially complete agreement/contract. In the case of George MwaLarumVsZaitunaKawuma SCCA No.3 of 1991 the Supreme Court held that an inchoate agreement is only so until consent is obtained.

In the instant case, though Counsel for the Plaintiff does not dispute the existence of the Agreement, he insinuated that the documents are inchoate because they are undated. I have looked at both PEX 1 and PEX 2 and

10 observed that they are undated but signed by the directors of both parties and the terms contained therein are certain. More so, the Agreement was fully executed given the fact that the Plaintiff took possession of the premises on 1^stNovember, 2010 as per clause 1.17 of PEX 2.  It is on the said terms that the Plaintiff acquired a right of possession of the 15 Defendant’s premises.

Therefore, directing my mind to the law and evidence, my inference is that, by the Plaintiff’s director appending his signature on PEX 1 and PEX 2, and by the Plaintiff’s conduct of taking possession of the Defendant’s premises, it gave its consent which in turn gave effect to the agreements

20 and thus the fact that the Agreements were not dated, in the circumstances, does not nullify PEX 1 and PEX 2.

In the premises, I find that PEX 2, the Lease (Tenancy) Agreement, is a valid agreement between the parties.

        ii) Whether the said Agreement was varied?

25 Section 91 of the Evidence Act, Cap. 8 excludes the oral testimony of the contents of a written agreement and stipulates that:

“When the terms of a contract or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to  be reduced to the form of a document, no evidence, except as mentioned in section 79, shall be given in proof of the terms of that contract, grant or other disposition of property, or of such matter except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained.”

10 Section 92 of the Evidence Act also provides that:

“When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to Section 91, no evidence of any oral agreement or statement shall be admitted, as between the

15              parties to any such instrument or their representatives in interest, for

the purpose of contradicting, varying, adding to or subtracting from its terms,…”

The exceptions to the above rule are contained in Section 92(a-f) of the

Evidence Act, which I shall consider in the evaluation of the evidence as

20 adduced by both parties. Section 66 of the Contracts Act, provides for the variation of contracts and it provides that, where any right, duty, or liability would rise under agreement or contract, it may be varied by the express agreement or by the course of dealing between the parties or by usage or custom if the usage or custom would bind both parties to the 25 contract.

Considering the above provisions and the Supreme Court decision in the case of Ben Kavuya and 2 Others VsWakanyira David George, SCCA No.31 of 2021, it is a general rule that oral evidence or statements shall not be admitted to contradict, vary, add or subtract any terms of a contract 30 that has been reduced into writing.

In the above case, His LordshipChristopher MadramaIzama, JSC, in emphasis of the general rule above, relied on Section 114 of the Evidence Act which provides for estoppel. The Section is to the effect that:

“When one person has, by his or her declaration, act or omission, intentionally caused or permitted another person to believe a thing to

10 be true and to act upon that belief, neither he or she nor his or her

representative shall be allowed, in any suit or proceeding between himself or herself and that person or his or her representative, to deny the truth of that thing.”

Hon. JusticeChristopher MadramaIzama, also quoted Lord Justice

15 Moore-Bick in the case of PeekayIntermark Ltd and Harish PawaniVs Australia and New Zealand Banking Group Ltd [2006] EWCA Civ 386, wherein he stated that:

“Where parties express an agreement of that kind in a contractual document neither can subsequently deny the existence of the facts

20 and matters upon which they have agreed, at least so far as concerns

those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel: See: Colchester Borough Council Vs Smith [1991] Ch. 448, affirmed on appeal [1992] Ch. 421.”

25 In the instant case, the Plaintiff contends that upon execution of PEX 1 and PEX 2 the terms, as of 2013 to 2014, were not restricted to the provisions of the two agreements but also to the course of dealing between the parties, during which the terms were varied creating both a written and oral contract under Section 9(2) of the Contracts Act.

Counsel argued that though there was no formal agreement as was required under clause 3 of PEX 2, the Defendant’s conduct waived its right to claim the original rent of USD 7,656 plus the service fees and VAT when it settled for a flat sum of USD 4,000 per month, which the Plaintiff duly paid, estopping the Defendant from claiming the original rent. That, 10 from January, 2013 to May, 2014, the Plaintiff paid the Defendant USD 4,000 every month and no balance was due.

In evidence, the Plaintiff relied on PEX 15, the amended record of payments of current rent from January, 2013 to May, 2014 with the receipts. I have carefully perused PEX 15 and the document shows a

15 breakdown of the rent payments, from January, 2013 to May, 2014 when the Plaintiff was blocked from accessing the premises. The breakdown of the rent payments is as follows:

It is reflected that after the revision of the terms, the Plaintiff paid USD

4,000 in cash as rent for January, 2013 and the rent balance was shown

20 as “Nil” as per receipt No.708 dated 15^th February, 2013, signed and issued by the Defendant, attached to PEX 15. For February, 2013, it is shown that a payment of USD 4,000 was made and the same was admitted by the Defendant.

For March, 2013, the Plaintiff paid USD 3,000 and USD 1,000 through

25 bank deposit slips dated 9^th April, 2013 and 15^th April, 2013 respectively as per the attached deposit slips. For April, 2013, USD 4,000 was deposited on 2^nd May, 2013 as reflected by the deposit slip dated 2^nd May, 2013 so attached.

For the month of May, 2013, the rent was deposited in instalments but

30 only the deposit slip of USD 2,000 dated 31^st May, 2013 was adduced. The Plaintiff stated that the balance of USD 2,000 was admitted in the Defendant’s statement.

For the month of June, 2013, the Plaintiff avers that rent was also deposited in instalments but only the deposit slip of USD 2,000 dated 7^th

June, 2013 was adduced however, upon perusal of PEX 15, the deposit

10 slip was not attached. For July, 2013, the rent was deposited in instalments of USD 1,000 and USD 2,600 as per the deposit slips adduced dated 16^th July, 2013 and 20^th July, 2013 respectively.

The Plaintiff stated that the other slips were not provided but according to receipt No.678 dated 29^th July, 2013, issued and signed by the 15 Defendant, payment of USD 4,000 as rent was acknowledged.

As for the month of August, 2013, two deposits were effected of USD 2,000 each as per the deposit slips dated 6^th and 13^th August, 2013. For the month of September, 2013 USD 4,000 was deposited as per the deposit slip dated 11^th September, 2013 and receipt No.001 dated 11^th20 September, 2013 was signed and issued by the Defendant.

For the month of October, 2013, the rent was paid in instalments to a total of USD 2,270 as of 2^nd November, 2013 as per the deposit slips so adduced. That on the same date, the Defendant closed the premises since the

Plaintiff had not completed payment of rent for October, 2013 and to that,

25 the Plaintiff’s director signed a commitment letter wherein he undertook to pay the balance of USD 1,230. As per receipt No.256 dated 2^nd November, 2013, signed and issued by the Defendant, the balance for the rent of October, 2013 was cleared.

For the month of November, 2013, the Plaintiff made deposits in

30 instalments all totaling to USD 4,000. This was acknowledged by the

Defendant as per receipt No.276 dated 14^th November, 2013. For December, 2013, PEX 15 shows that deposits were made on 29^th November, 2013, 12^th, 16^th and 20^th December, 2013 all totaling to USD 2,653. That the Defendant only issued receipt No.487 for the deposits of

20^th December, 2013. That the balance of USD 1,347 was paid into the 10 Defendant’s electricity account No. 2140025863602 with Stanbic Bank.

For the year 2014, PEX 15 shows that in January, the Plaintiff deposited USD 350 and receipt No.489 dated 21^st December, 2012 signed by the Defendant was issued. That the balance of USD 3,650 was paid in instalments on 11^th, 21^st, 22^nd, 24^th and 25^th January, 2014 as reflected in

15 the deposit slips so adduced. That the Defendant also acknowledged that the balance of USD 3,650 was banked as per receipt No.365 dated 25^th January, 2014. However, perusal of PEX 15 shows that the actual receipt No. is 385 and not 365 as alleged.

For the month of February, 2014, PEX 15 shows that the Plaintiff paid

20 USD 4,000 as per the deposit slips dated 26^th and 27^th February, 2014 and 1^st, 5^th, 6^th, 7^th, and 10^th March, 2014. That the Defendant further issued receipt No. 08 dated 10^th March, 2014 acknowledging that USD 4,000 as rent had been deposited in the bank. On perusal of PEX 15, the receipt

No. is 086 and not 08 as averred by the Plaintiff. For the month of March,

25 2014, the Plaintiff made deposits of USD 1,000, USD 600, USD 800, USD 800, and USD 800 as per the deposit slips dated 31^st March, 2014, 12^th, 15^th and 22^nd April, 2014 so adduced. Receipt No. 141 signed and dated 26^th April, 2014 was also issued by the Defendant showing that USD 4,000 was banked as rent deposit for March, 2014.

For the month of April, 2014, PEX 15 shows that the Plaintiff made deposits of USD 300, USD 650, USD 650, USD 1,600 and USD 800 as per the deposit slips so adduced dated 9^th,10^th,12^th, 13^th and 15^th May, 2014. Receipt No. 317 signed and dated 21^st May, 2014 was issued by the Defendant showing that the Plaintiff had banked USD 4,000 as the rent deposit for April, 2014. The rent payment for the month of May, 2014 was made in instalments as per deposit slips so adduced dated 21^st, 22^nd, 23^rd,

10 26^th, and 29^th May, 2014 as was acknowledged by the Defendant as per receipt No. 322, dated 29^th May, 2014 showing that the Plaintiff had banked USD 4,000 as rent arrears deposit.

In his testimony, DW1, when cross-examined on the receipts above, for example, receipt No.276 as attached to PEX 15, he denied the signatory

15 Robson contending that he was not employed by the Defendant though he knew him and acknowledged that he might have been instructed by a one Olga who works in the Accounts Department. DW1 also confirmed to Court that all the deposits contained in PEX 15 were genuine. In his submissions, Counsel for the Defendant referred to the proforma invoices

20 contained in DEX 15 addressed to the Plaintiff, showing that the Defendant constantly reminded the Plaintiff to pay the 3 months’ rent of USD 7,656 for each month, service fee for 3 months and the 10% as was agreed upon in PEX 1 and PEX 2 yet the Plaintiff continued to pay USD 4,000.

25 I have analyzed DEX 15 which contains six proforma invoices addressed to the Plaintiff prepared by Olga Alubo and Robson Okello. The invoices were for the months of June to August 2013, September to November, 2013, December, 2013 to February, 2014, March to May, 2014, June to

August, 2014 and September to November, 2014. According to DEX 15,

30 the Plaintiff was to pay a monthly rent of USD 7,656 for 3 months, a monthly service fee and VAT of USD 348 for 3 months and 10% escalation

on rent.  I have also observed that though the Defendant insists that the Plaintiff did not comply with the demands in the invoices, the invoices do not show any previous balance from the past months but systematically indicate the months and the amount required. No further evidence was presented to show the demand for the said amount. I have also observed

10 that all the acknowledgment receipts issued by the Defendant under PEX 15 do not show that there was any pending balance. Also, if there was any pending balance, it would have been captured in the commitment letter dated 2^nd November, 2013, adduced under PEX 15, when the premises had been closed due to the fact that there was a previous balance for the 15 month of October, 2013 only.

Given the above observations, the standard of proof in civil matters which is on the balance of probabilities, and considering the claim by each party and the evidence adduced in support, PW1’s testimony regarding the mode of payment and the amount of rent that was paid from January,

20 2013 to May, 2014, is consistent and well collaborated by PEX 15, that contains the bank deposit slips with well-defined dates and the receipts of acknowledgement from the Defendant. On the other hand, DW1’s testimony and the evidence contained in DEX 15 is inconsistent with the

Defendant’s receipts of acknowledgment contained in PEX 15 that were 25 not contested as analyzed above.

In the circumstances, the Plaintiff has established, on the balance of probabilities, that from January, 2013 to May, 2014, when the shop was closed, he was paying a flat rent of USD 4,000.

The next question then is; whether, the above mode of payment is proof of a variation, of PEX 1 and PEX 2?

I am mindful of the parole evidence rule as contained in Sections 91 and 92 of the Evidence Act, which strictly provide that variation of a written contract can only be done by a subsequent written agreement as discussed above. I am also alive to clause 43 of PEX 2 which provided that any agreement to vary the lease would be in writing and signed by the parties.

10 As earlier stated, the parole evidence rule, is not intransigent as it lays down exceptions, whereby a party can adduce evidence to elucidate the intention of the parties in a given contract. Section 92 (d) of the Evidence Act provides for cases where the existence of any distinct subsequent oral agreement may be allowed to rescind or modify any such contract, except

15 in cases where the contract is required to be in writing. This was emphasized by the Court in the case of MujuniRuhembaVsSkanka Jensen (U) Ltd (supra).

Considering the analysis and findings in the mode of payment of the rent from January, 2013 to May, 2014 and the Defendant’s conduct, it is

20 probable that there was an oral variation of the contract which is reflected under PEX 15 which was not contradicted during the hearing of the case. PEX 2 also required that any variation to the agreement had to be in writing and signed by the parties however, PW1 confirmed to Court that no variation agreement was executed to show the variation in the rent

25 payable. This therefore begs the question of whether the Defendant waived its right to claim the amount in issue.

I will consider the definition of the waiver as stated in the case of AgriIndustrial Management Agency Ltd VsKayonza Growers Tea Factory Ltd &Igara Growers Tea Factory Ltd (supra) relied upon by Counsel for the Plaintiff that was upheld by Hon. Justice Stephen Mubiru, in the case of Meridiana Africa Airlines (U) Ltd VsAvmax Spares (EA) Ltd, HCCS No. 111 of 2017, wherein he stated that:

“… a waiver of a contractual term can happen if the party deliberately fails to take certain actions or to take a positive act to strictly enforce the terms of a contract. In order to constitute a legal release or waiver10 of the contract rights, this action must be intentional and voluntary.The essential element of waiver is that there must be a voluntary andintentional relinquishment of a known right or such conduct aswarrants the inference of relinquishment of such right. It means the forsaking of the assertion of a right at the proper opportunity, for

15 example by a party forbearing from insisting on the mode of

performance fixed by the contract, the Court may hold that he haswaived his right to require that the contract be performed in thisrespect according to its tenor.” [Emphasis mine]

Based on the above authorities, PEX 15 presented by the Plaintiff to prove

20 the Defendant’s conduct to waive the rent agreed upon under PEX 1 and PEX 2; portrays that from January, 2013 to May, 2014 the Plaintiff consistently paid a flat rent of USD 4,000. The 1^streceiptNo.708 dated 15^th February, 2013, shows that the Plaintiff paid rent of USD 4,000 only in cash for the month of January, 2013 and the balance was indicated as

25 “NIL”. Receipt No.001 dated 11^th September, 2013, is an acknowledgement by the Defendant showing that USD 4,000 was banked by the Plaintiff as rent for September, 2013. The commitment letter dated 2^nd November, 2013 adduced under PEX 15 also shows that the Plaintiff was paying only USD 4,000 as the rent. It partly reads as follows:

“Having paid only United States Dollars Two Thousand Seven Hundred Seventy Only (USD $ 2,770), out of the Four Thousand, I hereby write to commit to pay the balance of United States Dollars One Thousand Two Hundred Thirty (USD $ 1,230) by end of day today without fail.” 

The said letter was received by Robson Okello whom DW1 claimed was not an employee of the Defendant yet he prepared some of the proforma10 invoices being relied upon by the Defendant under DEX 15. Receipt No. 256 signed and dated 2^nd November, 2013 was issued by the Defendant to confirm that the balance had been paid by the Plaintiff.

On 14^th November, 2013 receipt No.276 was also issued by the Defendant acknowledging that the Plaintiff had banked USD 4,000 as rent deposit.

15 On 20^th December, 2013 receipt No.487 was issued by the Defendant acknowledging payment of USD 1,500 as rent arrears; on 21^st December,

2013, the Defendant acknowledged payment of USD 350 vide receipt

No.489 as deposit; on 25^th January, 2014 the Defendant issued receipt

No.385 acknowledging receipt of USD 3,650 as rent arrears; on 10^th

20 March,  2014 receipt No.086 was issued by the Defendant acknowledging rent deposit of USD 4,000; on 26^th April, 2014 receipt No.141 was issued by the Defendant acknowledging payment of USD 4,000 as the rent deposit for March, 2014; on 21^st May, 2014 receipt No.317 was issued by the

Defendant acknowledging payment of USD 4,000 as the rent deposit for

25 April, 2014 and on 29^th May, 2014 the Defendant issued receipt No.322 acknowledging payment of USD 4,000 as rent arrears deposit.

To contradict the above, the Defendant presented DEX 15, which I have already analyzed and concluded that it is contradictory since even though the Defendant contends that those invoices were issued to remind the Plaintiff to pay USD 7,656 per month, the same Defendant issued the receipts under PEX 15 where it acknowledged the constant deposit of USD

4,000 as rent for the respective months even receipt No.708 shows that after the Plaintiff had paid USD 4,000 in cash, there was no balance. Therefore, the invoices adduced under DEX 15 are not to disregard the consistent evidence contained in PEX 15.

Besides that, no additional evidence was adduced by the Defendant to

10 disprove the acknowledgement in the above receipts by way of probably a notice or receipt, carrying forward the rental arrears or otherwise. The Defendant having had the knowledge and failed to insist on the precise mode of performance provided for under clause 7 of PEX 1 and clause 1.20 of PEX 2, it by conduct waived its right and cannot claim from the

15 same as was held in the case of Meridiana Africa Airlines (U) Ltd VsAvmax Spares (EA) Ltd (supra).

In the premises, my considered view is that the Agreement (PEX 2) was varied.

iii) Whether there was breach of the Agreement by either party

20 between 2013 and 2014?

Breach of a contract is where one or both parties fail to fulfil the obligations imposed by the terms of the contract. (See: Nakawa Trading Co. Ltd Vs Coffee Marketing Board Civil Suit No.137 of 1991).

Hon. Justice Stephen Mubiru also defined breach of a contract in the

25 case of Meridiana Africa Airlines (U) Ltd VsAvmax Spares (EA) Ltd (supra), to mean a violation of any of the agreed-upon terms and conditions of a binding contract, and this includes circumstances where an obligation that is stated in the contract is not completed on time. He went on to state that it is the failure, without legal excuse, to perform any promise that forms all or part of the contract, which includes failure to perform in a manner that meets the standards of the industry.

In the instant case, the Plaintiff and Defendant both contend that there was a breach of the terms of the said agreement between 2013 and 2014.

The Plaintiff’s particulars of breach as pleaded under paragraph 8(a)- (g)

10 of the amended plaint are; the Defendant’s failure to complete Forest Mall within  two years from 2010 as agreed; levying a service charge and service costs for the suit premises twice, which included inter alia costs of electricity, water, taxes and VAT on rent and on the service charges; issuing to the Plaintiff an eviction/demand notice while the Plaintiff had

15 religiously paid its rent to the Defendant fully; wrongfully evicting the

Plaintiff; confiscating and converting the Plaintiff’s properties; defying Court orders directing the Defendant to allow the Plaintiff back on the premises and the Defendant representing to the Plaintiff then that Forest

Mall would be a complete first class commercial centre with all amenities,

20 public entertainment at full occupancy within a period of 2 years from 2010, and failing to do the same. In its counterclaim under paragraph 18(a) – (e), the Defendant pleaded its particulars of breach as follows; the Plaintiff’s failure to pay rent three months in advance as agreed, failure to pay the full amount of rent as per the invoices, failure to pay the service

25 charge, VAT of 18% on the rent and the Plaintiff’s failure to clear the rent arrears before vacating the premises.

In his witness statement under paragraph 15, PW1 testified that due to the state of the premises and the economic down turn on the local and international business scene in 2012, the parties agreed that with effect 30 from 1^st January, 2013, the Plaintiff was to pay a flat rate of USD 4,000. PW1 further stated that from January, 2013 to May, 2014, the Plaintiff never paid any rent above USD 4,000 for any month and the Defendant invariably accepted the same and even indicated the balance as “NIL” after paying the rent for January, 2013. That the Defendant never demanded for any balance, until out of the blue in late May, 2014. In evidence,

Counsel for the Plaintiff relied on PEX 15 and submitted that the said 10 evidence was not shaken during cross-examination.

On the other hand, DW1 testified under paragraph 41 of his witness statement that the Defendant never revised the Plaintiff’s rent to USD 4,000 and always issued invoices of the full amount of USD 33,502 for every quarter. To support its case, the Defendant relied on DEX 15

15 asserting that its Accountant constantly invoiced the Plaintiff but the Plaintiff stubbornly ignored it. The Defendant then counterclaimed seeking USD 172,894 as the rent arrears for the period of January, 2013 to October, 2014.

Having held above that the Defendant by conduct waived its right to claim 20 the full amount stipulated in clause 7 of PEX 1 and clause 1.20 of PEX 2, it therefore cannot claim for the same.

Under paragraph 5(v) of its written statement of defence and counterclaim, the Defendant contended that the Plaintiff has never paid the decretal sum in Civil Suit No.451 of 2012. As evidenced by PEX

25 13/DEX 10, the Plaintiff and the Defendant entered into a Consent Judgment wherein the Plaintiff was to pay USD 50,000 as the final settlement for all the rental arrears of up to 31^st December, 2012 arising out of Civil Suit No.451 of 2012.

During his cross examination on 27^th February, 2024, DW1 when asked whether the Plaintiff had subsequently paid all the USD 50,000 arising

from the Consent Judgment, he answered that it was paid.  In the premises, the money arising from the Consent Judgment was fully paid by the Plaintiff.

I shall now consider whether the USD 4,000 was fully paid for all the months in the years 2013 and 2014.

10 As per my analysis of PEX 15 above, the Plaintiff made rent deposits of USD 4,000 for each month from January, 2013 to May, 2014. The said deposits are reflected in the deposit slips, some of which were in instalments as reflected in the analysis above, and the receipts thereto.

None of the receipts showed any arrears in rent. Likewise, the invoices

15 contained in DEX 15 relied upon by the Defendant, as analyzed above also, do not reflect any rental arrears for any month from January, 2013 to May, 2014.

I have also observed that invoice No. 446 dated 9^th May, 2014 prepared by

Robson Okello, is from 1^st June, 2014 to 31^st August, 2014 and invoice

20 No.047 dated 12^th August, 2014 is from 1^st September, 2014 to 30^th November, 2014. However, as testified by PW1, in June, 2014, the Defendant locked and put guards on the premises preventing the Plaintiff from accessing the same. DW1 also confirmed to Court during his crossexamination that by October, 2014 the Defendant had ejected the Plaintiff

25 from the premises. Accordingly, considering the undisputed evidence in PEX 15, the Plaintiff fully paid its rent from January, 2013 to May, 2014 and is not indebted to the sum claimed in respect of that period.

Regarding the breach by the Defendant to complete Forest Mall within 2 years from 2010 as agreed and levying a service charge as well as the service costs for the suit premises twice, no evidence was led to that effect and therefore, this Court will infer that the same were ignored since Court does not operate on speculations.

Further, regarding whether the Defendant misrepresented to the Plaintiff when it stated, prior to the execution of the agreement that; Forest Mall would be completed within two years and that it would be a complete first

10 class commercial centre with all amenities and public entertainment at full occupancy, I shall consider the definition of misrepresentation first.

Misrepresentation was defined in the case of Laura KinalwaVsCompuscan CRB Limited HCCS No. 237 of 2020 to mean a false representation of a matter of fact, whether by words or conduct, by false

15 or misleading allegations, or by concealment of that which is intended to deceive another so that he acts upon it to his legal injury.

It is now trite that a claim for misrepresentation requires that the statement that was made, must have been false and that the Defendant must have known that the representation was not accurate when the

20 contract was being made. (See: Laura KinalwaVsCompuscan CRB Limited (supra).

In the instant case, the Plaintiff avers that there was misrepresentation by the Defendant however in line with the authorities cited above, the Defendant ought to have known that the representation was not accurate.

25 In the matter at hand, it would be absurd to conclude that the Defendant knew before executing PEX 2 with the Plaintiff that it would fail to complete the construction of its mall. In the premises, there was no misrepresentation by the Defendant to the Plaintiff.

Also, the Defendant contended that the Plaintiff breached the contract when it made alterations to the premises without any consent from the Defendant as was required under clause 8 of PEX 2. During his cross examination, DW1 testified that the Plaintiff submitted its interior drawings to the Defendant’s architect for approval and the same were approved after confirmation that the Plaintiff’s works were not going to interfere with the strength of the building.  In the premises, the Plaintiff

10 sought approval before making the alterations to the premises as was confirmed by DW1.

As to whether the Defendant wrongfully evicted the Plaintiff, confiscated and converted its property; it is the submission of Counsel for the Plaintiff that the Plaintiff was religiously paying its rent until, 26^th May, 2014 when

15 the Defendant’s lawyers M/s Omongole& Co. Advocates, served upon the Plaintiff an eviction/demand notice, claiming rent arrears amounting to USD 293,070 to be paid within seven days as contained in PEX 17. That in disagreement with the said demand, the Plaintiff instituted this suit and that on the very day, an order as contained in PEX 20 was issued

20 prohibiting the Defendant from evicting the Plaintiff. That on 25^th August, 2014 vide PEX 23, the Plaintiff obtained another interim order stopping the intended eviction. The same order directed the Defendant to allow the Plaintiff to access the premises and re-open for business, but the Defendant defied the order and kept the premises locked.

25 That when the matter was moved from Nakawa Court to Commercial Division, on 30^th September, 2014 vide PEX 24, this Court issued an interim order directing the Defendant to allow the Plaintiff to access the premises but the Defendant defied the same and tricked the then Registrar of the Execution Division to renew the warrant of execution in HCCS No.

30 451 of 2012 and attach the Plaintiff’s property necessitating the amendment of the plaint to include wrongful confiscation of property,

eviction of the Plaintiff and termination of the tenancy. In reply to the above submissions, Counsel for the Defendant contended that, the Defendant obtained a Default Judgment of USD 117,213.25 for rent arrears, signage fee of USD 8,000 and interest of 25% per annum from the date of the cause of action till payment in full against the Plaintiff in Civil

10 Suit No.451 of 2012, when the Plaintiff opted not to defend the suit. That a decree was obtained vide DEX 4 and DEX 5. That the Defendant then obtained a warrant of attachment against the Plaintiff and an execution warrant dated 1^st November, 2012 as evidenced by DEX 6. That the

Plaintiff consequently issued a Barclays Bank cheque No. 000112 (DEX 7)

15 dated 31^st December, 2012 for USD 50,000, but upon realizing that no bank could cash a cheque for USD 50,000; the Defendant returned the cheque and the Plaintiff replaced it with 5 postdated Barclays Bank Cheques No. 000107, 000108, 000113, 000114 and 000115 each for USD 10,000 dated 31^st December, 2012 also marked as DEX 7.

20 Counsel for the Defendant further contended that upon taking the cheques to the bank, they were all dishonored and the Plaintiff was notified of the dishonor who instead filed an application to set aside the judgment and decree but did not prosecute the same. That upon realizing that the

Plaintiff had no interest in paying the debt, the Defendant instructed the 25 bailiffs to renew the warrant of execution and proceed with the execution. That at the commencement of the execution, the Plaintiff and Defendant consented to a sum of USD 50,000 as shown by DEX 10. That the said Consent Settlement had terms which the Plaintiff did not comply with.

That the Defendant only paid USD 14,000 and during this period, the 30 Plaintiff was in occupation of the premises and the debt amounted to USD

Analysis and Determination

According to the record, the Defendant sued the Plaintiff in 2012 vide Civil

Suit No.451 of 2012, a summary suit seeking to recover rent arrears of USD 117,213.43, a signage fee of USD 8,000 and interest of 25% per annum from the date of the cause of action until payment in full. On 23^rd

10 October, 2012; Judgment was entered against the Plaintiff as prayed in the plaint as per DEX 4. On 1^st November, 2012 a decree was issued as evidenced by DEX 5 and on the same day, vide EMA No.2233 of 2012, DEX 6, a warrant of attachment and sale of moveable property was issued by Court. Through PEX 12 and PEX 13/DEX 10, the parties on 25^th

15 March, 2013 executed a Consent Order on terms among others that, the Plaintiff pays USD 50,000 in cash in replacement of the bounced cheques and the Defendant was to waive all the balance of any rent up to 31^st December, 2012 that was part of the decretal sum in HCCS No.451 of 2012.

20 On 26^th May, 2014 the Plaintiff was served with a demand/eviction notice (PEX 17) for rent arrears of USD 293,070. In protest of the aforementioned sum, the Plaintiff instituted HCCS No.209 of 2014 at Nakawa Court and obtained an interim order (PEX 18 and subsequently PEX 23) restraining the Defendant from evicting the Plaintiff from the suit premises and

25 denying it access to the utilities/amenities. The Plaintiff also vide EMA No.1527 of 2014 (PEX 22), sought a stay of execution of the Consent Judgment and it was granted on 7^th July, 2014 by His Lordship Hon.Justice A.C OwinyDollo (as he then was), pending the decision of the Nakawa Court.

Vide PEX 23, on 25^th August, 2014, Hon. Justice Wilson MasaluMusene

(RIP ) issued an interim order restraining the Defendant from evicting the Plaintiff pending a ruling on 28^th August, 2014, or until further orders of the Court. The premises were to be opened until 28^th August, 2014. On 28^th August, 2014, His Lordship MasaluMusene (RIP) upon considering the fact that the Defendant’s HCCS No.451 of 2012 had been filed at

Commercial Court, caused the transfer of HCCS No.209 of 2014 to

10 Commercial Court.  On 22^nd September, 2014, the file was forwarded to the Registrar High Court, Commercial Division as per PEX 19. As evidenced by PEX 25, on 26^th September, 2014 the Defendant through a letter, moved the Registrar Execution Division for a return and renewal of a warrant in Civil Suit No.451 of 2012, on the grounds that the Plaintiff’s

15 file now HCCS 674 of 2014 had been transferred to the Commercial Division with no application for stay of execution, review or an appeal. On 30^th September, 2014, as reflected in PEX 26, the warrant of attachment and sale was renewed and execution took place thereafter.

From the foregoing, it is established that at the time of execution, several

20 Judicial Officers had granted interim orders restraining the Defendant from evicting the Plaintiff from the premises, the latest being the interim order that was granted on 30^th September, 2014, vide Misc. Application No. 852 of 2014 as per (PEX 24).

Despite the existence of the interim order and an order staying the

25 execution in HCCS No. 451 of 2012, the Defendant as per PEX 25, misrepresented the facts of the case when seeking the renewal of the warrant of the execution amounting to disregard/disobedience of the Court orders.  The Defendant has not disputed knowledge of the existence of the above orders.

It is trite that a Court order must be obeyed unless and until it has been set aside or varied by the Court.

In the case of Chuck Vs Cremer (1846) 1 Coop temp Cott 338, 47 ER 884, it was held that:

“A party, who knows of an order, whether null or valid, regular or irregular, cannot be permitted to disobey it… It would be most dangerous to hold that suitors, or their solicitors, could themselves

10 judge whether an order was null or valid-whether it was regular or

irregular. That they should come to the Court and not take upon themselves to determine such a question. That the course of a party knowing of an order, which was null or irregular, and who might be affected by it, was plain. He should apply to the Court that it might be 15 discharged. As long as it existed it must not be disobeyed.”

I have also considered Counsel’s duty to carry out the client’s instructions in the best way possible however, he/she owes a higher duty to the Court to avoid disobedience of Court orders and abuse of the Court process.

Disobedience of Court orders in my considered view dishonors the Court

20 as its orders are issued in vain and deters the dispensing of justice. Since there was a Court order prohibiting execution in HCCS No.451 of 2012 it was unlawful for the Defendant to evict the Plaintiff as well as proceed with the execution.

Regarding the confiscation and conversion of the Plaintiff’s properties;

25 during his cross examination, DW1 did not contest having engaged a bailiff after obtaining a warrant of attachment and sale, who took the items listed in an inventory (PEX 27) to a store. The items included small glass tables, small office chairs, a wooden bed, a mattress, display dummies, cloth stands, ladies shoes, television sets, cleaning machines, tables among others. Also, when asked about what happened to the property that had not been taken by the bailiff during his cross examination, DW1 replied

that they should be in the Defendant’s stores.  In light of the above evidence, the Defendant confiscated and converted the Plaintiff’s properties as stated in PEX 27.

In the premises, the Plaintiff did not breach the Lease (Tenancy) Agreement however, the Defendant breached the same when it issued an

10 eviction/demand notice. The Defendant also wrongfully evicted the Plaintiff, confiscated and converted its properties.

As a result, issue No.2 is answered in the affirmative and issue No. 3 is answered in the negative and therefore, the counterclaim fails.

Issue No.4: What remedies are available to the parties?

15 In its amended plaint, the Plaintiff sought the following:

1. A declaration that the Plaintiff is not indebted to the Defendant in rental arrears as claimed or at all.
2. A declaration that the Defendant breached its Tenancy/Lease Agreement with the Plaintiff.

20 c)A declaration that the Defendant is liable for misrepresentation.

1. General damages
2. Exemplary/punitive/aggravated damages
3. Special damages of USD 262,885.19 and UGX 1,079,467,490/=
4. Interest on (d) and (e) above at the Court rate from the date of

25 judgment till payment in full and on (f) above at the rate of 24% per

annum from the date of filing till payment in full.

h)

Costs of the suit.

Analysis and Determination

Section 60(1) of the Contracts Act provides that where there is a breach of contract, the party who suffers the breach is entitled to receive from the party who breaches the contract, compensation for any loss or damage caused to him or her.

10 a)Special damages

In the case of Mugabi John Vs Attorney General HCCS No.133 of 2002, special damages were defined as damages that relate to past expenses and loss of earnings which arise out of special circumstances of a particular case. In the case of W.M. KyambaddeVsMpigi District Administration

15 [1983] HCB 44, it was held that the guiding principle is that special damages must be specially pleaded and strictly proved. The evidence can be documentary or otherwise provided it is led to prove the special damages so sought.

It is also stated in the cases of Gapco (U) Ltd Vs A.S Transporters (U) Ltd

20                               CACA No.18 of 2004 and Haji AsumanMutekangaVs Equator

Growers (U) Ltd SCCA No.7 of 1995, that strict proof does not mean that proof must always be documentary evidence. Special damages can also be proved by direct evidence; for example, by evidence of a person who received or paid or testimonies of experts conversant with the matters.

25 Under paragraph 9 of its amended plaint, the Plaintiff pleaded the following particulars of special damages:

i)Costs and expenses on fixtures and fittings of USD 179,777.19 and UGX 449,427,498/= for expenses that were incurred on thetaxes for the fittings, accommodation and locally procuredmaterials

Counsel for the Plaintiff submitted that the above relates to the cost of fittings in dollars, the currency in which the payments were effected. He referred to the quotation of the wall fixtures, fittings and display as

10 contained in PEX 30, a breakdown of the cost of fittings, totaling USD 179,777.19. Counsel also referred to PEX 3, a bank transfer for the deposits and a receipt for the deposit, proof of payment of the balance and the bank confirmation of payment of the balance; signage designs from

Planet Neon at USD 13,934, item 2 on PEX 30, invoice by the supplier

15 contained in PEX 4 together with the bank transfer and the bank confirmation; freight charges contained in item 3 of PEX 30; the ceiling music and public address system, item 4 on PEX 30 proved by a receipt in PEX 5, expenditure on ceiling lights and item 5 in PEX 30 also contained in PEX 5. Counsel also sought for reimbursement of expenses

20 that were incurred on the taxes for the fittings, accommodation and locally procured materials amounting to UGX 449,427,498/=. The Plaintiff adduced PEX 6 and the receipts under PEX 7 and PEX 8.

On the other hand, Counsel for the Defendant submitted that much as the

Plaintiff pleaded and particularized the special damages, it failed to prove

25 the same as is required by the law and that therefore, Court should not award the same to the Plaintiff.

I have perused the evidence adduced by the Plaintiff and I shall proceed to

30

1)Costs and expenses incurred on the fixtures and fittings

The Plaintiff adduced PEX 3, which contains among others, a quotation of the items issued by Retouche Trading LLC and the total sum of the items listed in the quotation was 352,760 dirhams which translates to USD

96,564 at the then prevailing rate of 3.65 dirhams to the dollar. PEX 3

10 also contains a telegraphic transfer order and swift form, a statement of account, a bank notification and email from Retouche Trading LLC.

According to the telegraphic transfer order and swift form dated 25^th September, 2010, PW1 instructed Barclays Bank to transfer USD 30,000 to Retouche Trading LLC which, upon receipt of the deposit, it issued a

15 statement of account, dated 27^th December, 2010, showing that it had received USD 30,000 and that the remaining balance was USD 66,564. According to the bank notification dated 30^th March, 2011 the Plaintiff sent the balance of USD 66,564 to Retouche Trading LLC. The supplier even confirmed receipt of the money. (Pages 43-51 of the Plaintiff’s trial bundle).

20 2)Signage designs

Counsel for the Plaintiff submitted that 51,000 dirhams (USD 13,934) was incurred as per PEX 30. In evidence, the Plaintiff adduced PEX 4, a quotation by the supplier, a telegraphic transfer order and swift form dated

14^th January, 2011 and a bank notification dated 19^th January, 2011

25 proving that a transfer of USD 13,934 was made by Barclays Bank (U) Limited on behalf of the Plaintiff to the supplier for the signage designs.

(Pages 52-55 of the Plaintiff’s trial bundle).

3)Freight charges

Counsel for the Plaintiff sought USD 8,400 as per PEX 30 and relied on 30 PEX 4 on page 56,an invoice for the freight charges. Perusal of PEX 4 shows that indeed the total amount was USD 8,400 but only USD 4,500 was paid and it is indicated that there was a balance of USD 3,900 (Page 56 of the Plaintiff’s trial bundle).

4)Ceiling music/public address system

The Plaintiff sought USD 3,135 as per PEX 30 and adduced PEX 5, a

10 receipt titled “cash memo” from the supplier Soundline Electronics L.L.C (Br.) Perusal of PEX 5 shows that the 3,135 that was spent on ceiling music/public address system was in dirhams and not dollars as averred by the Plaintiff. 3135 dirhams would translate to USD 858.9 at the then prevailing rate of 3.65 dirhams to the dollar. (Page 57 of the Plaintiff’s trial 15 bundle).

5)Expenditure on the ceiling lights

The Plaintiff sought USD 3,734.19 as per PEX 30. In evidence, the Plaintiff adduced PEX 5 which also contains two telegraphic transfer orders and swift forms dated 15^th July, 2010 and 30^th December, 2010 respectively

20 wherein PW1 instructed Barclays Bank to transfer USD 163.26 and USD 1,570.93 for sample and lights purchase respectively. The instructions were duly executed as evidenced by the bank notifications on record. The Plaintiff also adduced another bank notification dated 9^th December, 2012 for transfer of USD 2,000, whose remittance information read as ‘lights’.

25 (Pages 58-63 of the Plaintiff’s trial bundle).

6)Professional fees for the five fitters

The Plaintiff sought USD 50,000 as per PEX 30 and relied on PEX 8 which contains the Curriculum Vitae (CVs) of the fitters and a receipt dated 7^th July, 2011 issued by Travel Care showing that USD 4,010 was spent as payment for five air tickets from DXB EBB DXB. (Pages 80-86 of the

Plaintiff’s Trial bundle).

The Plaintiff however, did not adduce any evidence as proof of payment of the claimed professional fees to the five professional fitters of USD 50,000. 7)Taxes

10 Counsel for the Plaintiff relied on PEX 30 and prayed for UGX 96,913,874/=, however no proof was adduced in Court to show that indeed the Plaintiff spent UGX 96,913,874/= on taxes.

8)Accommodation

Counsel for the Plaintiff sought to recover UGX 6,000,000/= that was

15 spent on accommodation for the five professional fitters. In evidence, the Plaintiff adduced PEX 8 which also includes a receipt dated 30^th May, 2011 issued by JBK Hotel showing that UGX 6,000,000/= was spent on accommodation for 5 people. (Page 88 of the Plaintiff’s Trial bundle).

9)Locally procured materials

20 Counsel for the Plaintiff sought to recover UGX 94,913,624/= that was incurred for the gypsum ceiling, electricals, plastering and painting as well as the air conditioning. The Plaintiff adduced PEX 6 which is a letter from JMR Afrika Investments Ltd forwarding the BOQs (Bills of Quantities) showing how much was estimated to be spent on the gypsum ceiling,

25 electrical works, wall plastering and painting works and floor tiling. The total amount estimated was UGX 94,913,624/=. Of the UGX 94,913,624/= alleged to have been spent, the Plaintiff only adduced PEX 7, a receipt dated 5

May, 2011 issued by Kalinda& Co. Limited showing that the Plaintiff paid UGX 46,800,000/= for the supply and installation of six units of air conditioners at Forest Mall. No other evidence was adduced to prove that more than UGX 46,800,000/= was spent on locally procured materials.

Under paragraph 8 of his witness statement, PW1 testified that when the

10 Plaintiff took possession of the leased premises in a shell form, it carried out extensive and expensive high level corporate branding such as using imported fittings, decorations, purchasing and importing all the equipment necessary to operate a high end enterprise. Since DW1 confirmed to Court that the Defendant took over the Plaintiff’s premises,

15 after wrongfully evicting it; then it is only fair and commercially just that the Plaintiff be reimbursed the costs and expenses that it has proved that it incurred to make the shell form premises tenantable.

As analyzed above, the Plaintiff proved that it incurred the following costs and expenses; USD 96,564 for the fittings and fixtures; USD 13,934 for

20 the signage designs; USD 4,500 for the freight charges; USD 858.9 for the ceiling music/public address system; USD 3,734.19 for the ceiling lights; USD 4,010 on the air tickets for the five fitters all amounting to USD 123,601. Further, the Plaintiff also proved that it spent UGX 6,000,000/= on accommodation for the five fitters and UGX 46,800,000/= for the locally 25 procured materials all totaling to UGX 52,800,000/=.

According to PEX 30 on page 387 of the Plaintiff’s trial bundle, other items were included under the cost for the fittings like television sets, coffee making machines, dummies, spring beds, office tables, massage beds, sink, cabins, shelves, CCTV system, computers, toilet set and dispensers.

30 The receipts for purchase of these items were not adduced with the exception of the receipts for a wall bracket and television sets. However,

my considered view is that these are items which the Plaintiff could use in the business in any other location and possibly continued to use them and therefore it would be unfair to consider those amounts under the special damages to award in this instant case. Accordingly, those specific costs shall not be awarded.

10 In summation, the Plaintiff is entitled to special damages of USD 123,601 (United States Dollars One Hundred Twenty Three Thousand Six Hundred One Only) and UGX 52,800,000/= (Uganda Shillings Fifty Two Million Eight Hundred Thousand Only) for thecosts and expenses incurred by the

Plaintiff on the fixtures and fittings, signage designs, freight charges,

15 ceiling music/public address system, ceiling lights, travel and accommodation expenses for the five fitters, and locally procured materials.

ii) Stock items confiscated/lost at UGX 236,280,000/=

Counsel for the Plaintiff submitted that this covers the stock which was

20 looted by the Defendant or its agents when it wrongly took over the premises, for which the Defendant is vicariously liable.

The Plaintiff adduced PEX 30 to show how much stock was taken or converted by the Defendant. These include; 240 pieces of ladies shoes at

UGX 60,000,000/=, 374 pieces of men’s shirts at UGX 74,000,000/=, 160

25 pieces of ladies blouses at UGX 24,000,000/=, 32 wall clocks at UGX 11,520,000/=, 18 wedding gowns at UGX 63,000,000/= and 94 pieces of toys at UGX 3,760,000/=. However, according to PEX 27, the bailiff’s inventory, the Defendant’s bailiff only took 120 pairs of ladies shoes, 37 pieces of shirts, 50 pieces of children’s toys and 20 wall clocks out of the 30 items being claimed to have been taken. In the premises, the Court is satisfied that the Plaintiff only lost 120 pieces of ladies shoes worth UGX 30,000,000/=; 37 pieces of men’s shirts worth UGX 7,320,856/=; 50 pieces of toys worth UGX 2,000,000/= and 20 wall clocks worth UGX 7,200,000/=, all totaling to UGX 46,520,856/=.

In the premises, the Plaintiff is awarded UGX 46,520,856/= for the stock 10 that was confiscated and taken by the Defendant.

iii)Loss of projected profits for the period up to the end of the leaseterm UGX 393,760,000/=

Counsel submitted that this item covers the profits the Plaintiff would have made up to the end of the agreed term of the tenancy as detailed in PEX 15 31.

In the case of Hajji AsumanMutekangaVs Equator Growers (U) Ltd(supra) it was stated that the evidence relating to special damages must show the same particularity as is necessary from its pleading. It should normally consist of evidence of particular losses such as the loss of specific 20 customers or specific contracts.

No evidence of loss of clients or contracts was presented to determine the loss of the projected profits. Accordingly, this item has not been proved and the sum claimed is hereby declined.

1. iv) Refund of electricity and water bills USD 41,000; refund of

25 security deposit USD 7,656 and claimable VAT refund USD

34,452

According to PEX 1 and PEX 2, the Plaintiff was supposed to pay a security deposit of USD 7,656, its electricity bill, water bill and VAT as a condition for being a tenant at the Defendant’s premises.

Clause 1.23 ofPEX 2, provides that the security deposit was to be paid at the time of signing of the Heads of Termsand clause 9 of PEX 1

10 provides that the security deposit was to be applied by the Defendant in case, at the end of the tenancy, the premises were not in a tenantable state.

In the instant case, the Defendant did not make a specific rebuttal to the claim for refund of the security deposit nor did it show that the premises

15 were not in a tenantable state to entitle the Defendant to apply the security deposit to meet the costs for any repairs that would be required as a result of the Plaintiff’s occupation. DW1, under paragraph 50 of his witness statement, stated that the bailiff removed whatever remaining item that was movable from the shop and handed back the shop to the Defendant

20 who are now in possession of the same. No reference was made to the need for repairs resulting from the Plaintiff’s occupancy. The Plaintiff is therefore entitled to be refunded the security deposit fee of USD 7,656.

For the refund of VAT; the Plaintiff seeks to be refunded the VAT that it allegedly paid under per PEX 1 and PEX 2 on grounds that it is VAT 25 registered and that the Defendant never remitted the same to URA.

Counsel for the Plaintiff submitted that the Defendant charged the Plaintiff USD 1,566 per month for 25 months on the rent paid and that the Defendant’s directors claimed that they would remit the said sum to URA as VAT but they never did so. Counsel for the Plaintiff further submitted

30 that the Defendant did not issue tax invoices except for one quarter and that as a result the Plaintiff could not claim for VAT refund of USD 34,452.

However, no evidence was adduced to prove the above assertions. Clause13 of PEX 1 stipulated that in addition to the above rental, the tenant would pay on demand by the landlord VAT and other related taxes levied from time to time in law. It therefore means that in addition to the rental sum, the Plaintiff was to also pay an additional amount for VAT and other

10 taxes upon demand by the Defendant since the stated rental fee was VAT exclusive.

The Plaintiff did not adduce any evidence to show that it paid the sum of USD 34,452 to the Defendant as provided in the aforementioned clause so as to be awarded the claimed sum. The Plaintiff only attached a third party

15 agency notice from URA to the Plaintiff marked as PEX32. However, this was a notice from URA for collection of taxes due and payable by the Defendant amounting to UGX 146,601,264/= and the same is not sufficient to support the claim by the Plaintiff for a refund of the claimed amount in this suit.

20 Further, DW1 testified under paragraph 53 of his witness statement, that the Plaintiff did not pay any VAT and that it was impractical to issue a tax invoice to the Plaintiff who owed the Defendant money and had not paid the taxes to remit to URA. This, claim is therefore declined.

For the refund of the electricity and water bills; it was agreed under PEX 25 1 and PEX 2 that the Plaintiff would cover its electricity and water costs. Therefore, there is no basis for granting a refund of the money spent on the same by the Plaintiff.

In conclusion, the Plaintiff is hereby awarded special damages of USD

131,257 (United States Dollars One Hundred Thirty One Thousand Two

30   Hundred Fifty Seven Only) comprising of USD 123,601 for the fittings and fixtures and USD 7,656 being the security deposit fee and UGX 99,320,856/= (Uganda Shillings Ninety Nine Million Three Hundred Twenty Thousand Eight Hundred Fifty Six Only) comprising of UGX 52,800,000/= for accommodation and locally procured materials and UGX 46,520,856 for the stock that was confiscated by the Defendant.

10 b)Exemplary/Punitive/Aggravated damages

As held by Hon. Justice Ssekaana Musa in the case of Luzinda Marion BabiryeVsSsekamatte (Alias Mulwana Samuel) & Others Civil Suit No.366 of 2017, the rationale behind the award of exemplary damages is that they should not be used to enrich the Plaintiff, but to punish the

15 Defendant and deter him from repeating his conduct. That it should not be excessive and must not exceed what would be likely to have been imposed in criminal proceedings if the conduct were criminal as was held by Spry V.P. in the case of ObongoOrude&AnotherVs Municipal

Council of Kisumu [1971] 1 EA 91. That all circumstances of the case

20 must be taken into account, including the behavior of the Plaintiff and whether the Defendant had been provoked as was held in the case of O’Connor VsHewiston [1979] Crim. LR 46, CA and Archer Brown [1985] QB 401.

In his submissions, Counsel for the Plaintiff contended that the

25 Defendant’s actions were made without caring whether it wiped out the Plaintiff’s life investments. That they were only interested in taking over the improvements by the Plaintiff on the property.

Considering the fact that the Defendant ignored and or refused to comply with the Court order that was issued restraining it from evicting the Plaintiff, I hereby award the Plaintiff exemplary/punitive/aggravated damages of UGX 30,000,000/= (Uganda Shillings Thirty Million Only).

c)General damages

In the case of Kabandize John Baptist and 21 Others Vs Kampala Capital City Authority CACA No. 36 of 2016 Court held that:

10     “The general rule regarding the measure of general damages is that,

the award is such a sum of money that will put the party who has been injured or who has suffered as adjudged by Court in the same position as he or she would have been had he or she not sustained the wrong for which he or she is getting the compensation.”

15 It is also trite that general damages are awarded at the discretion of Court and are compensatory in nature. (See: TakiyaKashwahiri&AnotherVsKajungu Denis CACA No. 85 of 2011). However, the Plaintiff has to lead evidence to show what damage he or she suffered at the instance of the Defendant.

20 In the instant case, the Plaintiff prayed to Court to consider the efforts it took to prepare the premises for business as shown in PEX 4 -PEX 10 and PEX 16 and to prevent the Defendant from breaching the contract through the numerous Court orders as exhibited in PEX 18 – PEX 24.

That as per PW1’s testimony, the Plaintiff had closed down all its other

25 businesses so as to pool resources to set up the business, the subject of the suit. In his submissions, Counsel sought for general damages of UGX 1,000,000,000/= as proposed by PW1.

Considering the inconvenience reflected above which affected the Plaintiff and the nature of his business, general damages of UGX 70,000,000/= would be sufficient in my considered opinion. Therefore, I hereby award the Plaintiff general damages of UGX 70,000,000/= (Uganda Shillings Seventy Million Only).

10 d)Interest

Section 26(2) of the Civil Procedure Act, Cap. 282 empowers this Court to award interest on a decretal sum. Furthermore, in the case of WallersteinerVsMoir [1975] 1 All ER 849, Lord Denning M.R stated that:

15   “…In equity interest is awarded whenever a wrongdoer deprives a

company of money which it needs in its business. It is plain that the company should be compensated for the loss thereby occasioned to it. Mere replacement of the money years later is by no means adequate compensation, especially in days of inflation. The company should be

20   compensated by award of interest… But the question arises; should it

be simple interest or compound interest? On general principles I think it should be presumed that the Company (had it not been deprived of the money) would have made the most beneficial use open to it. It may be that the company would have used it in its own trading operations;

25              or that it would have used it to help its subsidiaries. Alternatively, it

should be presumed that the wrongdoer made the most beneficial use of it. But whichever it is, in order to give adequate compensation, the money should be replaced at interest with yearly rest.”  See also the case of Waiglobe (U) Ltd VsSai Beverages Ltd HCCS No.16 of

30

The Supreme Court in the case of Surgipharm Uganda Ltd VsAnatoliBatabane Civil Appeal No.11 of 2020 authoritatively made a distinction on the award of interest on special and general damages.

In his submissions, Counsel for the Plaintiff prayed to Court to award interest at the Court rate on the general and exemplary/punitive/

10 aggravated damages from the date of Judgment until payment in full and to also award interest at a rate of 24% per annum on the special damages from the date of filing the suit until payment in full.

Accordingly, interest at the Court rate of 6% per annum is awarded on the general damages and exemplary/punitive/aggravated damages from the 15 date of Judgment until payment in full.

Regarding interest on the special damages; in the case of Mohanlal

KakubhaiRadiaVsWarid Telecom Uganda Ltd HCCS No. 224 of

2011 it was held that in determining a just and reasonable rate, Courts take into account the following:

20 “The ever rising inflation and drastic depreciation of the currency. A Plaintiff is entitled to such rate of interest as would not neglect the prevailing economic value of money, but at the same time one which would insulate him or her against economic vagaries and the inflation and depreciation of the currency in the event that the money awarded is

25 not promptly paid when it falls due.”

I find the claimed interest rate of 24% per annum to be very high and no convincing justification has been provided by the Plaintiff for the same. I therefore, award interest at the rate of 20% per annum on the special damages from the date of filing the suit until payment in full.

e)Costs

As provided for under Section 27 of the Civil Procedure Act, the costs of any action, follow the cause unless the Court for a good reason orders otherwise. Further, in the case of Uganda Development Bank Vs

Muganga Construction Co. Ltd [1981] HCB 35, Hon. Justice Manyindo10 (as he then was) held that:

“A successful party can only be denied costs if it is proved, that but for his or her conduct, the action would not have been brought. The costs will follow the event where the party succeeds in the main purpose of the suit.”

15 In the circumstances, since there are no reasons to deprive the Plaintiff of the same, it is entitled to costs of the suit.

In the premises, the following orders are issued:

1.It is hereby declared that the Plaintiff is not indebted to the Defendant in rental arrears as claimed or at all.

20        2.It is hereby declared that the Defendant breached the Lease (Tenancy) Agreement.

3.The Plaintiff is hereby awarded special damages of USD 131,257 (United States Dollars One Hundred Thirty One Thousand Two

Hundred Fifty Seven Only) comprised of USD 123,601 for the fittings

25 and fixtures and USD 7,656 being the security deposit refund and UGX 99,320,856/= (Uganda Shillings Ninety Nine Million Three Hundred Twenty Thousand Eight Hundred Fifty Six Only) comprised of UGX 52,800,000/= for accommodation and locally procured materials and UGX 46,520,856/= for the stock that was confiscated.

4. The Plaintiff is awarded exemplary/punitive/aggravated damages of UGX 30,000,000/= (Uganda Shillings Thirty Million Only).
5. The Plaintiff is awarded general damages of UGX 70,000,000/= (Uganda Shillings Seventy Million only).
6. Interest is awarded on the sums in (3) above at the rate of 20% per 10 annum from the date of filing the suit until payment in full.
7. Interest is awarded on the sums in (4) and (5) above at the rate of 6% per annum from the date of Judgment until payment in full.
8. Costs of the suit are awarded to the Plaintiff.
9. The Counterclaim fails.

15 It is so ordered.

Dated, signed and delivered electronically via ECCMIS this 29^thday of October, 2024.

Patience T. E. Rubagumya

20                                          JUDGE

29/10/2024

7:45am

25

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