THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

CIVIL DIVISION

CIVIL SUIT NO.117 OF 2016

SOPHIE NAKITENDE::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::PLAINTIFF

VERSUS

MABU COMMODITIES LIMITED:::::::::::::::::::::::::::::::::::::::::DEFENDANT

BEFORE: HON.JUSTICE SSEKAANA MUSA

JUDGMENT

BACKGROUND

The plaintiff brought this suit against the defendant for breach of tenancy
agreement, special damages, general damages, recovery of valuable
business items (tools of trade) confiscated by the defendant as well as costs
of this suit.

The plaintiff entered into a tenancy agreement in 2008 with the defendant
whereupon the plaintiff allocated shop No. 420 on Mabirizi Plaza located
along Kampala road within Kampala city centre. The plaintiff prior to
taking the shop, she paid a goodwill of 8,000,000/= to the previous tenant.

In 2016, the plaintiff slightly delayed to meet her rental obligations for the
first quarter of the year and while she was away, the defendant without
according her a hearing broke into her shop on 15 th March 2016, seized the
merchandise and locked it up.
The defendant contended that the plaintiff defaulted on her rent for the
month ending 15th January 2016 and closed her shop and disappeared
without notifying the defendant’s officers.

The plaintiff declined to enter into a formal tenancy agreement for the year
starting 2016. Owing to her failure to settle rental arrears, the defendant on
the 21st day of January 2016 closed the plaintiff’s shop demanding that she
clears her rental obligation.

That on the 15th day of March 2016, the plaintiff’s merchandise was in the
presence of the LC I chairperson transferred to the store room for storage.
The plaintiff continuously ignores the defendant’s demands to collect her
merchandise which keeps accumulating storage costs.

The defendant filed a counter-claim for recovery of accumulated storage

costs of 9,500,000/=at the rate of 500,000/= per week, general damages and
costs of the suit.

Representation

The plaintiff was represented by Mr. Walikagga Isaac of MMAKS Advocates

and the defendant was represented by Mr. Kuteesa Paul of Arcadia
Advocates

Scheduling

The parties filed a joint scheduling memorandum where they failed or

refused to agree to any facts between themselves and yet there are some
facts from the pleadings which are indeed the same and common like the
plaintiff being in occupation of the shop and the seizure of her property by
the defendant for non-payment of rent.

The parties in their joint scheduling agreed on the following issues for
determination;
 1. Whether there was any valid tenancy between the plaintiff and
defendant?
2. If so, whether the tenancy agreement between the plaintiff and
defendant was lawfully terminated?
3. Whether the tenancy agreement between the plaintiff and the
defendant was breached and if so by whom?
4. Whether the defendant was lawfully entitled to take possession of the
rented premises?
5. Whether the plaintiff is entitled to the return and /or value of the
property seized by the defendant and if so how much should be paid
to her?
6. Whether the counter-defendant/plaintiff is indebted to the
counterclaimant in the sum of 9,500,000/=
7. What remedies are the parties entitled to?

The parties lead evidence of one witness to prove their respective claims
and thereafter filed written submissions. I have read and considered them
in my analysis of the case.

Whether there was any valid tenancy between the plaintiff and
defendant?

The plaintiff testified that she has been occupying the shop No. L1-20 since
2008 and was paying rent of 1,000,000/= per month to the defendant
although the defendant was acknowledging only 500,000/=. That she was
supposed to pay rent every 15th day of the month.

The defendant witness also testified that the plaintiff was a tenant who was
occupying a shop on Mabirizi complex and was supposed to rent on every
15th of the month.
The defendant in his written statement of defence paragraph 6.4 contended
“that the plaintiff declined to enter into a formal tenancy agreement for
the year starting January 2016”

Resolution.

Whether there was any breach of the agreement by the parties.

The plaintiff counsel led evidence that she was a tenant and the defendant
also confirmed that she was a tenant and occupying a shop on Mabirizi
complex for a period of about 8 years.

Therefore there was no basis of raising the issue. No evidence has been led
to the contrary. The defendant in paragraph 6.4 attempted to deny the
existence of a tenancy agreement in the pleadings.

Based on the evidence on record, there was a tenancy agreement between

the plaintiff and the defendant. This was an actual tenancy by possession
and payment of rent; unwritten tenancy.

If so, whether the tenancy agreement between the plaintiff and

defendant was lawfully terminated?

The plaintiff’s counsel submitted that the plaintiff adduced evidence that
she was occupying the shop on Mabirizi complex L1-20 since 2008 paying a
sum of 1,000,000/= to the defendant although the defendant only
acknowledged 500,000/= in their receipts every month.

It was the testimony of the plaintiff that on 16 th December 2016, the

defendant without closed her shop and seized her trading stock for alleged
default of rent.

The defendant’s counsel contended that the plaintiff breached the tenancy
by refusing to pay rent for the months 15 th December 2015-15th January
2016, and 15th January 2016 to-15th February 2016 which was payable in
advance.

That since the plaintiff had not paid rent by 16th December 2016, according
to counsel she was in breach of the tenancy. Failure to pay on that date
amounted to breach of the periodic tenancy.

Determination

This issue hinges on whether there was a breach by the plaintiff on the 16 th
December 2015, when the shop was closed by the defendant.

This was an oral contract and the court has drawn inferences from how the
oral contract was being performed. In such circumstances it may be hard to
impute any fundamental terms but rather the conduct of the parties would
guide the court in establishing when a breach would arise. In absence of
any formal document the parties’ intention must be inferred from the
circumstances and parties conduct. See Kenya Shell Ltd v Vic Preston Ltd
HCCC No. 3948 of 1999

The defence witness testified that “the shop was closed on 16th December 2016.
She was given 10 days to clear the rent on 21st January it was permanently closed.
There were communications promises between the client and management. We
tried to communicate to her from 16th December until 15th March. It was always
from us and no response from her.”

The defendant who wanted to apply the strict rules of enforcing the
contract had a duty to ensure that the contract terms are in writing and this
would have avoided any such issues of trying to enforce oral terms which
are specifically not agreed upon but rather are used by the landlord as
when he deems fit.
It is clear that by the time the plaintiff’s shop was closed on 16 th December
she was not in rent arrears. The argument of counsel for the defendant that
she was in arrears is devoid of merit.

Black’s Law Dictionary 11th Edition 2019 defines “arrears” as follows;

The quality, state, or condition of being behind in the payment of a debt or the
discharge of an obligation.

In the case of Chukwuma F. Obidegwu v Daniel B. Ssemakadde HCCS

No.59 of 1992 [1992] II KALR 64 the court noted that; Rent is due in the
morning of the day appointed for payment but it is not in arrears until after
midnight. See also Aspinall v Aspinall [1961] Ch 526

Secondly, the manner in which the tenancy was being executed allowed the
plaintiff some flexibility and it would not be true to say that every 15 th day
of the month the tenancy would be terminated.

According to some of the receipts of payment tendered in court as exhibit

PE-2 the payment for the period 15/7/2015 to 15/8/2015 was effected on
24/07/2015 after about 9 days. The period 15/8/2015 to 15/9/2015 was paid
for on 27/08/2018 after 12 days.

It can be deduced from these receipts that indeed the 15 th day of the month
was not strictly enforced within the conduct of the parties as to entitle the
defendant to close the plaintiff’s shop on the 16 th day of December 2016. In
fact the plaintiff (PWI) during cross examination testified that sometimes
we could pay in advance and sometimes in arrears.

In addition the oral agreement did not provide for consequences for non-
payment of rent on the due the 15 th day of the month. The absence of any
written tenancy would imply that no stringent terms could be evoked to
the extent of closing the shop without notice or some due process.
The defendant disadvantaged herself by failing to reduce the terms of the
tenancy in writing and could not be allowed to come up with unreasonable
terms not agreed upon with the tenant (plaintiff). The law allows a
landlord to recover rent through distress for rent under the Distress for
Rent (Bailiffs) Act instead of using irregular and illegal means of recovery.
It would be a challenge to court to allow the defendant who claims unpaid
rent in circumstances where there is no written tenancy.

The landlord should not be allowed to use all means available to recover
rent or obtain vacant possession for non-payment rent by a tenant. A
landlord should not exercise his rights of re-entry or recovery of rent extra-
judicially and acts of hooliganism should not be encouraged or allowed by
a court of justice. Parties ought to manage their businesses (rental) in an
organized or orderly manner in order to avoid self-help measures in
landlord-tenant relationship which may turn out be very unreasonable and
unfair. See Peter Mburu Echaria and another v Priscilla Njeri Echaria Civil
Application No. 149 of 1997

In addition, the act of the defendant seizing the property of the plaintiff
was also illegal since there was no agreement that if she defaults on the
rent payments, the defendant would be allowed to close the shop and
attach/seize the property. Such measure as noted earlier would be illegal
and contrary to the unwritten agreement between the parties.

Similarly removal of the property for purposes of obtaining vacant

possession was equally illegal and unlawful. All the above scenarios would
have been better dealt with in a written tenancy agreement, which would
have set out known terms to the plaintiff as a tenant.

In the case of Wildlife Lodges t/a Landmark Hotel v Jacaranda Hotel Ltd
HCCC No. 521 of 1999; the court noted that unless a tenant agrees to give
up possession, the landlord has to obtain an order of a competent court to
obtain an order of possession.

This court shall not allow landlords to use extra-judicial means in recovery
of rent arrears or vacant possession especially where there is no written
tenancy agreement to regulate the relationship between the landlord and
the tenant. In the present case, the use of the area LC chairperson to
oversee the whole process of taking the plaintiff’s property could not
validate an illegal exercise. In the case of Gusii Mwalimu Investment Co.
Ltd & Other v Mwalimu Hotel Kisii Ltd Court of Appeal Civil Appeal No.
160 of 1995 Justice Tunoi JA noted as hereunder;

“I have no hesitation whatsoever in holding that the landlord did all it could to
obtain possession unlawfully and the Learned Judge was entirely right in making
the orders he made. If what the landlord did in this case is allowed to happen we
will reach a situation when the land lord will simply walk into the demised
premises exercising his right of re-entry and obtaining possession extra-judicially.
A court of law cannot allow such state of affairs whereby the law of the jungle takes
over. It is trite law that unless the tenant consents or agrees to give up possession
the landlord has to obtain an order of a competent court or a statutory tribunal to
obtain an order for vacant possession.”

This court equally agrees with the submission of counsel for the plaintiff
when he notes as follows;

It is illegal and blatant abuse of process for a land to just take the law into
their hands and lock-up premises that has been contractually handed over
to a tenant just to intimidate the tenant into paying rennet even before
there is default. Such conduct is common place in our society especially in
shopping arcades.
This unfair habit must be put in check and interventions by a landlord
should be in accordance with the law or due process and not capricious.
No landlord without a written tenancy agreement should evict a tenant
without due process or in an arbitrary manner.

The defendant breached the tenancy agreement when it locked the

premises of the plaintiff’s shop on 16th December 2016 and seized her
trading stock. It unlawfully terminated the tenancy agreement.

Whether the plaintiff is entitled to the return and /or value of the property
seized by the defendant and if so how much should be paid to her?

This issue is not contested. The defendant took the plaintiff’s trading stock
and they have confirmed that they indeed removed the trading stock. The
exercise according to DW 1 was carried out in the presence of the area LC I
chairperson of the area.

The contention is about the quantity of the things that were removed from
the shop. This court would not insist on receipts as proof of special
damages she listed the things in her shop at the time of illegal closure. She
availed a list of items she left in the shop and came to court with the same
claim. If the defendant wanted to dispute the same, he ought to have cross-
checked the listed items against their own list to disprove the special
damages. The only question in defence counsel’s view was that she did not
have receipts.

The stated position is that for as long as there is sufficient proof of the loss
actually sustained which is either a direct consequence of the Defendant’s
action/omission or such a consequence as a reasonable man would have
contemplated, this would suffice in place of physical and/or documentary
evidence. See Byekwaso v. Mohammed [1973] HCB 20.
Proving special damages is always not by documentation. The law only
requires particularizing the special damages and not proof by documentary
evidence. It is not intended to prove special damages beyond reasonable
doubt. See Nankabirwa Irene v UMEME Ltd HCCS No. 310 of 2016

The plaintiff’s list was admitted in evidence and was not impeached in
cross examination.

The plaintiff is awarded a sum of 74,608,800/= being the value of the

property wrongfully seized by the defendant.

General Damages

With regard to general damages; the character of the acts themselves,

which produce the damage, the circumstances under which these acts are
done, must regulate the degree of certainty and particularity with which
the damage done ought to be stated and proved. As much certainty and
particularity must be insisted on, both in pleading and proof of damage, as
is reasonable, having regard to the circumstance and nature of the acts
themselves by which the damage is done. See Ouma vs Nairobi City
Council [1976] KLR 298.

The awards reflect society’s discomfiture of the wrongdoer’s deprival of

the man’s liberty and society’s sympathy to the plight of the innocent
victim. The awards therefore are based on impression.

The defendant sought UGX 100,000,000 in general damages. I have not

seen basis for such an amount. I find the award of UGX 50,000,000
sufficient in the circumstances as general damages.

Interest
Section 26 provides for an award of interest that is just and reasonable. In
the case of Kakubhai Mohanlal vs Warid Telecom Uganda HCCS No. 224
of 2011, Court held that;
 “ A just and reasonable interest rate, in my view, is one that would
keep the awarded amount cushioned against the ever rising inflation
and drastic depreciation of the currency. A plaintiff ought to be
entitled to such a 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 any economic vagaries and the inflation
and depreciation of the currency in the event that the money awarded
is not promptly paid when it falls due”

Special damages shall attract an interest of 15% from the date of filing the
suit. General damages shall attract interest of 10% from the date of this
Judgment.

Whether the counter-defendant/plaintiff is indebted to the counterclaimant

in the sum of 9,500,000/=

The counter-claimant in its counter-claim contended that the storage costs

continue to accumulate at the rate of 500,000/= every week. I find this
outrageous since the monthly rent was 500,000/= per month. The counter-
claimant should have left the plaintiff’s goods in the shop since it is
cheaper than the store which is 3 times higher than the rent.

This assertion would give credence to the plaintiff’s testimony that indeed
they were paying rent of 1,000,000/= but she was given receipts of
500,000/=. This is matter of interest and it may be the justification why the
counter-claimant does not have any tenancy agreement with the tenants.

This may appear to be a scam for defrauding revenue by the landlords

which even makes the tenancy unenforceable and against public policy.

No court ought to enforce an illegal contract where the illegality is brought

to its notice and if the person invoking the aid of court is himself
implicated in the illegality. See Heptulla v Noormohamed [1984] KLR 580
The counter-claim fails since the seizure of plaintiff’s property was illegal
or wrongful.

The plaintiff is awarded costs of the suit and counter-claim.

It is so ordered.
Dated, signed and delivered by email & WhatsApp at Kampala this 15 th
day of May 2020

SSEKAANA MUSA
JUDGE