Wakilii

Nalongo Estates Limited v Kampala Capital City Authority and Another (Originating Summons 5 of 2020)

High Court · [2021] UGHCLD 120 · 2021 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating summons for determination of questions arising from a Memorandum of Understanding concerning lease extensions and government infrastructure projects
Decision
Application granted with detailed orders for survey, valuation, compensation, and lease extensions to facilitate the Kampala Flyover Project while protecting the plaintiff's property rights

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that the Memorandum of Understanding between the parties constituted a binding contract requiring the first defendant to immediately grant lease extensions to the plaintiff. The court ordered that the first defendant must complete the lease extension process for the affected properties, and that a survey be conducted to determine the acreage required for the Kampala Flyover Project. The plaintiff is entitled to compensation for land and developments affected by the project before implementation commences, and the residue land shall be leased to the plaintiff for a full term.

Outcome

Application granted with detailed orders for survey, valuation, compensation, and lease extensions to facilitate the Kampala Flyover Project while protecting the plaintiff's property rights

Facts

Nalongo Estates Limited had been the lessee of three properties in Kampala for fourteen years under leases and a management agreement. Upon expiry of the initial lease terms, the plaintiff applied for renewal and extension to full term leases. On 17 May 2017, KCCA council recommended approval of the lease extensions. However, the properties were identified as being affected by government infrastructure projects including the Kampala Flyover. Following a presidential meeting on 7 July 2017, the parties executed a Memorandum of Understanding on 19 March 2020 to resolve ownership issues and enable implementation of the Flyover project. The MOU recognized KCCA's approval of the plaintiff's lease renewal applications and provided for immediate extension of leases. Despite the MOU, the defendants had not completed the lease extension process. UNRA entered the properties in November 2020 and placed mark stones covering sixty decimals to map the flyover route. The plaintiff sought court intervention to enforce the MOU terms and facilitate smooth project implementation while protecting its property rights.

Issues

  1. Whether the process of finalizing the extension of the lease to a full term in respect of properties comprised in LRV 4211 Folio 14 Plot 96A-100A Kitante Road and LRV 2825 Folio 1 Plot 34E-38E Jinja Road should be completed by the first defendant pursuant to the Memorandum of Understanding.
  2. What is the most cost effective and efficient way of ensuring the smooth implementation of the Kampala Flyover Project in co-existence with the plaintiff's rights under the Memorandum of Understanding?

Orders

  • The 1st defendant is under obligation to grant extension of the full term leases to facilitate a smooth implementation of the Kampala Flyover Project.
  • The process of finalizing the extension of the lease to a full term in respect of the properties comprised in LRV 4211, Folio 14 Plot 96A-100A Kintante Road and LRV 2825 Folio 1 plot 34E-38E Jinja road, should be immediate, and must be completed by the 1st defendant pursuant to the Memorandum of Understanding.
  • A survey shall be conducted within a period of two weeks from the date of delivery of this decision to identify the part of the suit land to be acquired for the Kampala Flyover project.
  • The 1st defendant is to hand over to the plaintiff the residue for the certificates of title for plot 34E-38E Jinja road, Kampala upon implementation of the project, excluding roads and channel reserves, with the user as public open space.
  • The plaintiff shall get an immediate extension on FRV 992 Folio 17 (formerly LRV 4211 Folio 15, Plot 5 Park Lane Kampala), the property that is not affected by the project.
  • A lease agreement shall be entered between the 1st defendant and the plaintiff and a certificate of title covering the residue for LRV 4211, Folio 14 Plot 96A-100A, Kintante Road issued to the plaintiff company by the 1st defendant for a full term lease.
  • The 2nd defendant is to hand over to the plaintiff certificate of title for the suit land for the residue within a period of two weeks after the survey report is filed in court, and before commencement of the implementation of Government project.
  • The project shall be embarked on after the plaintiff has received fair and adequate compensation from the 2nd defendant for the areas affected by the project.
  • The 2nd defendant shall be required to give the plaintiff written notice of any planned demolition on any part of the suit land.
  • The plaintiff shall vacate any and all portions of land identified as required for the implementation of the project, within the time as may be agreed upon between the plaintiff and the 2nd defendant.
  • A copy of the survey report shall be availed to each party and to court within seven days after completing the survey.
  • The value of the lands, buildings and other developments made on the land by the plaintiff which are likely to be affected by the project shall be determined by the Chief Government Valuer.
  • The Chief Government Valuer shall file a valuation report in court within seven days after the exercise of valuation has been conducted; and serve each party with a copy.
  • The cost of valuation and survey shall be met by the 2nd defendant, except where each party may wish to engage private valuers/surveyors to oversee the processes.
  • Each party shall bear its own costs in this matter.

Rules and key headnotes

Memorandum of Understanding — Binding Nature — Intention to Create Legal Relations
A Memorandum of Understanding may constitute a binding contract where the parties intended to create legally binding obligations and the terms are sufficiently clear and certain to be enforceable. The test is objective: if a reasonable person would consider that there was an intention to contract, the promisor will be bound. The enforceability depends on the content, nature of agreement, language and intention of the parties, assessed by looking at the totality of circumstances including the type of agreement, completeness and specificity of terms, and the nature of the parties' relationship.
Memorandum of Understanding — Substance Over Form — Enforcement as Contract
Where an agreement is described as a Memorandum of Understanding but in substance and from all indications is an enforceable contract, courts will enforce it as a contract with attendant legal consequences. Equity looks at the substance rather than form. The terms of the agreement will be assessed objectively, and intention will be assessed by the content, not the title or label of the document.
Local Government — Council Resolutions — Binding Effect on Executive
Under the Public Procurement and Disposal of Assets Act 2013, Kampala Capital City Authority is a procuring and disposal entity. Decisions made by its council on behalf of that entity are legal and binding. The mayor together with the council have the mandate to pass lawful decisions on behalf of the authority to be implemented by the executive director.
Property Rights — Compulsory Acquisition — Fair Compensation
Article 26 of the Constitution recognizes every person's right to own property. No person shall be compulsorily deprived of property except where the taking is necessary for public use and is made upon prompt payment of fair and adequate compensation prior to the taking of possession or acquisition of the property. A person having an interest in land, including unregistered interest or one who is in occupation, is entitled to compensation under the Land Acquisition Act.
Compulsory Acquisition — Procedure — Survey and Valuation Before Taking
Under the Land Acquisition Act, only a person authorized by the Minister may enter upon land, survey it and ascertain its suitability. A person who suffers damage as a result of the exercise of such powers is guaranteed compensation by Government. The procedure outlined in the Act must be followed, including proper survey, valuation, and payment of compensation before taking possession, particularly where a sitting tenant has equitable rights in the property.
Lease Extensions — Urgency Where Government Project Pending
Where a lessee's rights are contingent upon a government priority project and a binding agreement provides for immediate extension of the lease, the term 'immediate' must be applied bearing in mind the urgency called for by the priority project. The lease extension cannot remain in abeyance if there is a pending government project on the land which is the subject of the lease, as delay in granting registration would inevitably delay implementation of the entire government program.
Interpretation of Contracts — Clear and Unambiguous Terms — Court's Role
In constructing contractual provisions, the object of court is to give effect to what the parties intended. Where parties have willingly entered into an arrangement, the role of court becomes restricted to reading and interpreting the meaning and intention behind the terms in case of disagreement. A party cannot question its own mandate or raise matters of concern at a late stage which could have been raised when negotiations were ongoing.

Legislation cited (9)

Cases cited (10)

  • George William Kakoma v Attorney General [2010] HCB 78
  • Sebuliba v Cooperative Bank Ltd [1982] HCB 130
  • Oketha v Attorney General (Civil Suit No. 0069 of 2004)
  • Simon Tendo Kabenge T/A M/S Simon Tendo Kabenge Advocates v Mineral Access Systems (U) Ltd (HCCS No. 275 of 2011)
  • Agri Industrial Management Agency Ltd v Kayonza Grower Tea Factory Ltd and Another (HCCS No. 819 of 2004)
  • Kyarimpa Sarah v Harriet Nassozi Hewett (HCCS No. 794 of 2016)
  • Balfour v Balfour [1919] 2 KB 571
  • Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8
  • Weddington Productions Inc v Flick (1998) 60 Cal App 4th 793
  • Nalongo Estates Ltd v Kampala City Council Authority (CAD-ARB-No. 27 of 2012)

Full judgment

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

Nalongo_Estates_Limited_v_Kampala_Capital_City_Authority_and_Another_(Originating_Summons_5_of_2020)_[2021]_UGHCLD_120_(4_June_2021)
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.