Wakilii

Mbale Soap Works Limited v Lubuulwa (Civil Appeal 26 of 2024)

High Court · [2024] UGHC 958 · 2024 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from Chief Magistrate's decision in Civil Suit No. 180 of 2022
Decision
Lower court judgment set aside. Tenant to receive refund of Ugx 1,200,000 and return of goods upon payment of interest on rent arrears and storage charges. Landlord's counter-claim effectively allowed in part.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the initial tenancy agreement continued to govern the parties after its stated expiry date where the tenant remained in occupation and continued paying rent on the same terms. The alleged addendum was invalid for lack of proper execution and consent. The landlord's distrain of the tenant's goods for rent arrears was lawful under the tenancy agreement clauses permitting re-entry and distress without notice. The trial magistrate erred in applying the Landlord and Tenant Act 2022 retrospectively and in awarding damages to a tenant who was in default. The appeal was partly allowed.

Outcome

Lower court judgment set aside. Tenant to receive refund of Ugx 1,200,000 and return of goods upon payment of interest on rent arrears and storage charges. Landlord's counter-claim effectively allowed in part.

Facts

The Respondent tenant occupied commercial premises owned by the Appellant under a written tenancy agreement from 1 August 2021 to 31 December 2021 at Ugx 550,000 per month, with a security deposit of Ugx 1,650,000. After the stated term expired, the tenant remained in occupation and continued paying rent. The Appellant alleged the parties signed an addendum extending the tenancy for one year, which the Respondent denied, alleging the signature was forged. On 3 May 2022, the Respondent was in rent arrears of Ugx 850,000. The Appellant re-entered the premises and distrained the tenant's goods. The Respondent paid the arrears on 21 May 2022 and sued for breach of contract, return of goods, and damages. The trial magistrate found the distrain unlawful and awarded damages. The Appellant appealed.

Issues

  1. Whether there was a valid tenancy agreement between the parties after 31 December 2021.
  2. Whether the Plaintiff had a maintainable cause of action after disregarding the alleged addendum tenancy agreement.
  3. Whether the Appellant's distrain of the Respondent's items was lawful given the rent arrears.
  4. Whether the trial magistrate erred in applying the Landlord and Tenant Act 2022 to conduct that occurred before the Act came into force.
  5. Whether the trial magistrate properly assessed the value of the distrained property at Ugx 13,585,500.
  6. Whether the trial magistrate correctly awarded Ugx 2,200,000 as damages for rent paid in advance.
  7. Whether the trial magistrate erred in awarding general damages of Ugx 4,000,000 to a plaintiff who was in default.
  8. Whether the trial magistrate's failure to consider the counter-claim caused a miscarriage of justice.

Orders

  • The judgment and orders of the lower court are set aside.
  • The Appellant shall refund to the Respondent Ugx 1,200,000 being money paid but not used.
  • The Appellant shall refund all the Respondent's items which were confiscated as stated in DEXH.6.
  • The Respondent shall pay the Appellant interest for late payment of rent for March and April 2022 as per the tenancy agreement.
  • The Respondent shall pay storage charges at Ugx 100,000 per month from 1 June 2022 to date.
  • Costs of this appeal and those of the lower court are awarded to the Appellant.

Rules and key headnotes

Contract — Addendum — Requirements for Validity — Consent and Execution
A contract addendum is not legally binding unless both parties fully understand its terms and approve the changes in writing with proper execution. Where a party denies signing an addendum and the signature is contested, the burden lies on the party relying on the addendum to prove its validity, including by subjecting the signature to handwriting examination.
Tenancy — Continuation of Tenancy Beyond Fixed Term — Implied Terms
Where a fixed-term tenancy agreement expires but the tenant continues in occupation and pays rent on the same terms without objection from the landlord, and no new written agreement is executed, the original agreement continues to govern the parties by implication, with time of expiry not being of the essence.
Contract — Writing Requirement — Contracts Exceeding 25 Currency Points
Under section 10(5) of the Contracts Act, contracts the subject matter of which exceeds 25 currency points must be in writing. A mutual oral arrangement regarding rental premises cannot bind the parties if it falls within the statutory writing requirement; in the absence of such written agreement, the original written terms continue to apply.
Landlord and Tenant — Distress for Rent — Lawfulness of Distrain Where Contractual Clause Permits Re-entry Without Notice
Where a tenancy agreement contains clauses permitting the landlord to re-enter the premises, terminate the tenancy, and distrain goods for rent arrears without notice or recourse to court upon the tenant's default in payment, the exercise of such contractual right when rent is in arrears is lawful and does not constitute an illegal or unlawful act.
Legislation — Retrospective Application — General Rule Against Retrospectivity
The law does not apply retrospectively. An Act that commenced on 17 June 2022 cannot be applied to conduct that occurred on 3 May 2022. A trial court errs in law by applying legislation to events that occurred before the legislation came into force.
Evidence — Burden of Proof — Inventory of Distrained Goods
Where a tenant's representative was present during the distrain of goods and an inventory was made in the presence of witnesses including the local council chairperson, but the representative failed to participate responsibly in the process, the tenant cannot later challenge the inventory list. An LC1 chairperson's presence and stamp on an inventory provides sufficient authentication even absent formal signatures by all parties present.
Landlord and Tenant — Security Deposit — Application to Renovation Costs
A security deposit paid under a tenancy agreement is primarily intended to cover damages to the premises at the end of the tenancy. Where the landlord proves the tenant left the premises in a damaged state requiring renovation, the cost of renovation is properly deducted from the security deposit before any refund is made to the tenant.

Legislation cited (7)

Cases cited (5)

  • Father Nomensio Tiberanga (Supreme Court Criminal Appeal No. 17 of 2002)
  • E/S Emaar India LTD V. Turan Aggarwal Project LLP & Anor Supreme Court of India Civil Appeal No. 6774 of 2022
  • Greenboat Entertainment Ltd v City Council of Kampala (High Court Civil Suit No. 0580 of 2003)
  • Rutagarama Bosco Byoma v Meera Investment Limited T/A Bukoto Heights Apartments (Miscellaneous Application No. 2184 of 2023)
  • BT Devin Katti & others V. Kamataka Public Service Commission & Others Supreme Court of India Civil Appeal No. 2270 of 1987

Full judgment

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Mbale Soap Works Limited v Lubuulwa (Civil Appeal 26 of 2024) [2024] UGHC 958 (14 October 2024)
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.