Wakilii

Kiran Dayauli v Real Wood Works Co. Ltd and Another (Civil Suit No. 65 of 2021)

High Court · [2026] UGHCCD 88 · 2026 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of rent arrears and enforcement of guarantee
Decision
Judgment entered for the Plaintiff against both Defendants jointly and severally for rent arrears, VAT, moderated interest, and costs

Observed later treatment

Cited — treatment unverified cited in 2 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 2 times with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The High Court held that a valid lease agreement existed despite minor clerical inconsistencies in property description where parties' conduct confirmed mutual intention. VAT was payable separately from rent under clear contractual terms. Oral evidence of repair cost offset was inadmissible under the parol evidence rule and contradicted express lease covenants prohibiting alterations without written consent. The guarantor's liability crystallised upon the principal debtor's default. Contractual interest at 2.5% monthly was moderated to court rate from filing date to avoid punitive effect while respecting commercial autonomy.

Outcome

Judgment entered for the Plaintiff against both Defendants jointly and severally for rent arrears, VAT, moderated interest, and costs

Facts

The Plaintiff leased showroom and warehouse space at Plot 103 Jinja Road to the 1st Defendant under a written lease agreement requiring monthly rent of USD 5,750 payable quarterly in advance plus VAT and 2.5% monthly interest on unpaid amounts. The 2nd Defendant, as director of the 1st Defendant, executed a personal guarantee. The 1st Defendant took possession in April 2019, enjoyed a two-month rent holiday, and paid rent from June 2019. The 1st Defendant defaulted on rent for February and March 2020, totalling USD 11,500 plus VAT. The Defendants claimed an oral agreement allowing offset of repair costs against rent and alleged the lease was void due to inconsistent property descriptions. The Plaintiff demanded payment from both Defendants. The Defendants vacated in March 2020 without clearing arrears.

Issues

  1. Whether the Defendants are liable to pay the Plaintiff the demanded sum?
  2. What remedies are available to the parties?

Orders

  • The 1st Defendant, Real Wood Works Co. Ltd, shall pay the Plaintiff, Kiran Dayauli, the sum of USD 11,500 representing rent arrears for the months of February and March 2020.
  • The 1st Defendant shall pay the VAT on the above rent arrears at the prevailing government rate as per the lease agreement.
  • Contractual interest at the rate of 2.5% per month shall apply from the date of default (February 2020) up to the date of filing of the suit.
  • Interest at the court rate shall run from the date of filing of the suit (2021) until full payment is made.
  • The 2nd Defendant, Osman Sahin, is jointly and severally liable with the 1st Defendant for the payment of rent arrears, VAT, and interest as above.
  • Costs awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Lease Agreements — Validity — Effect of Minor Clerical Inconsistencies
Minor clerical inconsistencies in property description do not invalidate a lease agreement where the subject matter is ascertainable from attached plans and the parties' conduct confirms mutual intention regarding the demised premises.
Evidence — Parol Evidence Rule — Oral Variation of Written Contract — Admissibility
Under sections 91 and 92 of the Evidence Act, oral evidence cannot be admitted to vary the clear terms of a written contract unless fraud, mistake, or misrepresentation is proved. An alleged oral agreement permitting offset of repair costs that fundamentally alters financial obligations under a written lease is inadmissible.
Land & Property — Landlord and Tenant — Alterations and Improvements — Covenant Against Alterations
Where a lease contains an express covenant prohibiting alterations without prior written consent and stipulating that any approved modifications are at the lessee's expense, a tenant who undertakes improvements without written consent cannot claim reimbursement or set-off against rent arrears.
Contract Law — Guarantee — Liability of Guarantor — Co-extensive Liability
Under section 70 of the Contracts Act, the liability of a surety is co-extensive with that of the principal debtor unless otherwise provided. Upon default by the principal debtor, the guarantor's liability crystallises immediately without the creditor first exhausting remedies against the principal debtor.
Contract Law — Contractual Interest — Penalty Clauses — Court's Discretion to Moderate
While courts ordinarily respect freedom of contract in commercial transactions, section 61 of the Contracts Act empowers the court to award reasonable compensation not exceeding the stipulated sum where a provision operates as a penalty. Contractual interest at 30% per annum may be moderated to court rate from the date of filing suit where strict enforcement would be punitive rather than compensatory.
Land & Property — Landlord and Tenant — VAT on Rent — Contractual Obligation
Where a lease agreement expressly provides that VAT is payable at the prevailing government rate upon presentation of a tax invoice, VAT is contractually separate from and additional to rent. An assertion that rent was inclusive of VAT directly contradicts clear contractual language and is inadmissible.

Legislation cited (12)

Cases cited (3)

  • Tui UK v Griffiths [2023] UKSC 48
  • Paul Kasagga & Another v Badala Bank (U) Ltd (Miscellaneous Application No. 013 of 2008)
  • Joseph Akol v Innovative Masters (Civil Suit No. 175 of 2013)

Cases citing this judgment (2)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Kiran Dayauli v Real Wood Works Co. Ltd and Another (Civil Suit No. 65 of 2021) [2026] UGHCCD 88 (23 March 2026)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.