THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
[COMMERCIAL DIVISION]
CIVIL SUIT NO. 719 OF 2020
1. MR.MICHEAL NJOROGE NGANGA
2. MRS.PATRICIA NYAMURWA NJOROGE::::::::::::::::PLAINTIFFS
VERSUS
1. CORNERSTONE TOURS AND TRAVEL (U) LTD
2. BRIAN ARIMPA:::::::::::::::::::::::::::::::::::::::::::::::::DEFENDANTS
BEFORE: HON. JUSTICE DUNCAN GASWAGA
JUDGMENT
[1] The plaintiff sued the defendants for special damages of Ugx
50,496,830 arising out of breach of contract; general damages for
inconvenience; interest on (a) and (b) at 1.8% per month from the date
of breach of the tenancy agreement till payment in full; costs of the suit
and any other remedy court shall find appropriate in the circumstances.
[2] The background of this suit is that the plaintiffs who are registered
proprietors of land comprised in Plot 4 Buku Road, Entebbe in Uganda
and all developments thereon acquired the property by way of mortgage
from Housing Finance Uganda Ltd and remit payments of the loan from
the proceeds of rent got from the premises. The plaintiffs rented the
said land and buildings thereon to cornerstone Tours and Travel
Uganda Ltd and Brian Arimpa on 01/09/2019 for two years i.e.
beginning from 01/10/2019 to 01/10/2021. The premises rented were
for commercial purposes and specifically to house or accommodate the
defendant’s clients due to its strategic location. The agreed monthly rent
payment was USD 2,200 payable 3 months in advance from
01/10/2019. It was agreed that the defendants were to pay utility bills
without fail and should the utilities be disconnected for nonpayment, the
disconnection fee would be paid by the defendants. It was further
agreed that the defendants would keep the plaintiffs fixtures found in
the house in good and decorative repair and any damage caused to the
building would be made good by the defendants. The defendant then
fundamentally breached the terms of the agreement by not paying rent
as expected and the rent arrears now stand at USD 10,400. The
defendants have also not paid utility bills as expected and to date the
arrears of water and electricity bills stand at Ugx 3,050,830/= and
consequently the same have been cut off by service providers for
nonpayment of the bills to which reconnection fees and fines are all due
including charges for emptying the septic tank. The defendants further
caused damage on part of the buildings and the repairs and renovations
shall cost Ugx 3,926,000. The defendants wrote to the plaintiffs
promising to make good the breach but to date they haven’t yet during
the country wide lockdown business was as usual but the defendants
willfully neglected to pay rent. The plaintiffs interest rate on the loan
used to purchase the premises from Housing Finance Bank continue to
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accumulate and the property is under threat of being foreclosed by the
bank, the reason for this suit
[3] On 27/05/2021. the parties entered a partial consent with the following
terms; that the defendants owe the plaintiffs rent arrears of USD 8,200
(United States Dollars eight thousand two hundred), utility bills of
USD 872 (United States Dollars eight hundred seventy two) and
costs so far at the time of the partial consent USD 572 (United
States Dollars five hundred seventy two). By request of the
defendants, they were to start making payments to the plaintiffs as
follows;
1. USD 1,429 (United States Dollars one thousand four
hundred twenty nine) together with USD 572 (United States
Dollars five hundred seventy two) of the then costs on
05/07/2021:
2. The 2nd payment of USD 1,429 was to be made on
05/09/2021, subsequent monthly payment of USD 596 starting
from 31/10/2021 up to 31/08/2022. The above payments were
to be made without any breach or default and such would fall
due at 8% per annum and execution to ensue.
3. It was further agreed that the contested issues would be put
before the Judge for assessment and determination as soon
as the consent is entered and the same would form part of the
judgment sum payable at once not later than 31/07/2022.
[4] During the hearing of the case on 18/08/2021 the defendants did not
turn up and without excuse at all. The plaintiff sought and obtained
leave to proceed with the case exparte. Only one witness, the plaintiff
was called to testify.
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[5] Issues framed;
1. Whether the defendants are liable to pay renovation costs
2. What are the remedies available for the parties
Issue 1: Whether the defendant is liable to pay the utility costs
that accrued before they left the premises
[6] The defendants were required to keep the premises in decorative
tenantable repair as they were found and make good any damage
caused as a result of removal of their things. This they did not do and
all the repair expenses were borne by the plaintiff. These were; Main
house paint; Ugx 1,160,000/=, Main house fittings; Ugx 1,492,000/=,
Boys quarter paint; Ugx 1,259,000 all totaling to Ugx 3,911,000/=.
The plaintiffs also incurred Labor (Renovation and Utility
Reconnection) to the tune of Ugx 2,050,000/=.
From the proof presented by the plaintiffs, it is indeed apparent that the
defendants defaulted on a number of items as listed above in
contravention with the earlier agreed on position in the rental
agreement. No evidence whatsoever was brought by the defendants to
contradict this position save for their failure to honor their word on
payment of the outstanding sums agreed upon by way of consent. In
the circumstances therefore, the defendants are liable to pay the utility
costs of Ugx 3,911,000/= and Ugx 2,050,000/= respectively that
accrued before they left the demised premises. The first issue is
answered in the affirmative.
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Issue 2: What are the remedies available to the parties?
[8] With regard to the remedies available, the plaintiff prayed for general
damages judicially measured in the circumstances to atone the
plaintiffs; reconnection, renovation and labor fees of Ugx
7,621,000/=; principal amount of USD 9,072; costs so far incurred
at the time of the execution of the partial consent USD 572; 8%
interest p.a from the date of the breach of the partial consent until full
and final settlement; costs for prosecuting the contested issues and
incidental costs incurred; any other remedy court deems fit.
[9] As for general damages, it was submitted for the plaintiff that the
defendants did not pay for utility services at the time they left the
premises and the same were disconnected. The plaintiffs went ahead
to incur all these expenses. The water and plumbing fees accrued to
Ugx 524,000 and Electricity and electrical requirements accrued to Ugx
1,136,000 both totaling to Ugx 1,660,000/=. The defendants further
defaulted on rent and as per the agreement, a penalty of 1.8% per
month was to be charged on the outstanding rent which the defendants
have not paid to date. The defendants further left the premises abruptly
without giving the required 3 months’ notice to the plaintiffs. That the
proceeds from the said premises were servicing a loan acquired from
Housing Finance Bank, rental tax was charged on the same and the
plaintiff has made numerous trips to Kampala from Nairobi to attend to
this trial. See Stroms Vs Hutchinson (1905) AC 515; Addis Vs
Gramophone Co, Ltd (1909) AC 488
[10] It should be noted that general da mages are compensatory in nature in
that they should restore some satisfaction, as far as money can do, to
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the injured plaintiff. See. Takiva Kashwahiri & Anor Vs Kaiunqu
Denis, C.A.C.A No. 85 of 2011. It is apparent that the plaintiff has faced
enormous inconvenience and suffering due to the actions of the
defendants for failure to honor the rental agreement. This has in effect
greatly affected the plaintiffs. In light of the applicable principles of law,
I shall award Ugx 20,000,000/= general damages as a suitable and
sufficient sum to atone for the injury and inconvenience occasioned to
the plaintiff. I believe this will restore some satisfaction to the plaintiff.
[11] The plaintiff has also prayed that court awards him interest at the rate
of 8% per annum from the date of the breach of the partial consent until
full and final settlement.
[12] In Premchandra Shenoi and Anor Vs Maximov Oleg Petrovich.
SCCA No.9 of 2003. The Supreme Court held thus:
“In considering what rate of interest the respondent should have
been awarded in the instant case, I agree that the principle
applied by this Court in SIETCO Vs NOBLE BUILDERS (U) Ltd
(supra) to the effect that it is a matter of the Court’s discretion is
applicable. The basis of awards of interest is that the defendant
has taken and used the plaintiff's money and benefited.
Consequently, the defendant ought to compensate the plaintiff
for the money. In the instant case the learned Justices of Appeal,
rightly in my opinion, said that the appellants had received the
money for a commercial transaction. Hence the Court rate of 6%
was not appropriate and I agree with them. The rate of interest
of 20% awarded by the Court of Appeal was more appropriate"
Following the above discourse and guidance, the court finds a rate of
interest of 6% on the sums awarded herein to be just and fair and is
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accordingly imposed. The rate shall apply to the outstanding balance
and on the general damages claimed and awarded.
[13] The plaintiff has succeeded on all issues in the case and court sees no
compelling and justifiable reasons for not awarding him costs of the
case. See National Pharmacy Ltd (supra) and Jenniffer Rwanyindo
Aurelia & Anor Vs School Outfitters (U) Ltd, CACA No. 53 of 1999
Section 27 (1) of the CPA is instructive on the matter and
states: “(1) Subject to such conditions and limitations as may be
prescribed, and to the provisions of any law for the time being in force,
the costs of the incident to all suits shall be in the discretion of the
court or judge, and the court or judge shall have full power to
determine by whom and out of what property and to what extent those
costs are to be paid, and give all necessary directions for the purposes
aforesaid"
Accordingly, the plaintiff is also awarded costs of prosecuting
the contested issues.
[14] Resultantly, upon the plaintiffs proving their case, on a balance of
probabilities, judgment is accordingly entered against the defendant
and the court hereby makes the following orders;
i. that the defendants pay to the plaintiffs the principal amount in the
sum of USD 9,072 (United States Dollars nine thousand seventy
two)
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that the defendants pay to the plaintiffs a sum of Ugx 7,621,000
(Uganda shillings seven million six hundred twenty one thousand)
for reconnection, renovation and labor costs incurred by the
plaintiffs
ill
IIL that the defendants pay to the plaintiffs a sum of Ugx 20,000,000/=
(Uganda shillings twenty million only) as general damages;
iv. that the sums awarded in (i), (ii) and (Hr) above shall each attract
an interest rate of 6% from the date of Judgment till payment In
full;
v. that the defendants pay costs of this suit.
Dated, signed and delivered at Kampala this 6th day of April 2022
Duncan Gaswaga
JUDGE
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