Select Garments Limited v Old Stanley Hotel Limited (Civil Suit 674 of 2014) [2024] UGCommC 322 (29 October 2024)

Key Facts

Transaction Type

Issues

• The court evaluated whether the Plaintiff is indebted to the Defendant in the sum of USD 172,894 in rent arrears for the period from January 2013 to October 2014, addressing conflicting evidence about payments and acknowledgments.
• The court assessed whether the Defendant revised the Plaintiff's monthly rent from USD 7,656 to USD 4,000, considering the parties' conduct and whether this constituted a valid variation of the contract.
• The court considered the appropriate remedies for the Plaintiff, including declarations of non-indebtedness, general and exemplary damages, special damages for fittings and confiscated stock, interest, and costs of the suit, while the Defendant's counterclaim failed.
• The court determined whether either the Plaintiff or the Defendant breached the Tenancy Agreement between 2013 and 2014, including the Plaintiff's claim of wrongful eviction and the Defendant's counterclaim of unpaid rent and service charges.

Holdings

• 1. It is hereby declared that the Plaintiff is not indebted to the Defendant in rental arrears as claimed or at all.
• 2. It is hereby declared that the Defendant breached the Lease (Tenancy) Agreement.
• 7. Interest is awarded on the sums in (4) and (5) above at the rate of 6% per annum from the date of Judgment until payment in full.
• 8. Costs of the suit are awarded to the Plaintiff.
• 6. Interest is awarded on the sums in (3) above at the rate of 20% per annum from the date of filing the suit until payment in full.
• 5. The Plaintiff is awarded general damages of UGX 70,000,000/= (Uganda Shillings Seventy Million only).
• 4. The Plaintiff is awarded exemplary/punitive/aggravated damages of UGX 30,000,000/= (Uganda Shillings Thirty Million Only).
• 3. The Plaintiff is hereby awarded special damages of USD 131,257 (United States Dollars One Hundred Thirty One Thousand Two Hundred Fifty Seven Only) comprised of USD 123,601 for the fittings and fixtures and USD 7,656 being the security deposit refund and UGX 99,320,856/= (Uganda Shillings Ninety Nine Million Three Hundred Twenty Thousand Eight Hundred Fifty Six Only) comprised of UGX 52,800,000/= for accommodation and locally procured materials and UGX 46,520,856/= for the stock that was confiscated.
• 9. The Counterclaim fails.

Remedies

• The Defendant's counterclaim seeking USD 172,894 in rent arrears was dismissed.
• Interest at 20% per annum was awarded on special damages from the date of filing until payment, and at 6% per annum on general and exemplary damages from the date of judgment until payment.
• The Plaintiff was awarded special damages of USD 131,257 (USD 123,601 for fixtures and USD 7,656 for security deposit) and UGX 99,320,856 (UGX 52,800,000 for accommodation and locally procured materials, UGX 46,520,856 for confiscated stock).
• The court declared that the Plaintiff is not indebted to the Defendant in rental arrears as claimed or at all, and that the Defendant breached the Lease (Tenancy) Agreement.
• The Plaintiff was awarded the costs of the suit as the successful party.
• Exemplary/punitive/aggravated damages of UGX 30,000,000 were awarded to the Plaintiff due to the Defendant's defiance of court orders and wrongful eviction.
• General damages of UGX 70,000,000 were awarded to the Plaintiff for the inconvenience caused by the Defendant's actions.

Monetary Damages

Legal Principles

• The court found that the defendant waived their right to claim the original rent by accepting the reduced USD 4,000 payments for 25 months without objection, as per the definition of waiver in Halsbury's Laws of England and the case of Meridiana Africa Airlines (U) Ltd Vs Avmax Spares (EA) Ltd.
• The court considered the parole evidence rule (Sections 91 and 92 of the Evidence Act), which generally bars oral evidence to vary a written contract. However, exceptions were recognized, including waiver and the parties' conduct, allowing the plaintiff's evidence of a reduced rent agreement to be admitted.
• The court applied the doctrine of estoppel, holding that the defendant's conduct in accepting the reduced rent of USD 4,000 per month prevented them from later claiming the original contractual amount of USD 7,656. This was based on Section 114 of the Evidence Act, which states that a party cannot deny a fact they intentionally caused another to believe and act upon.
• The court applied the civil standard of proof (balance of probabilities) to determine that the plaintiff had sufficiently proven the rent was reduced to USD 4,000 per month from January 2013 to May 2014, as evidenced by consistent payments and acknowledgment receipts.

Precedent Name

• Arch. Joel Katerega & Another Vs Uganda Post Ltd T/A Posta Uganda
• Makubuya Enock Willy T/a Pollaplast Vs Songdoh Films (U) Ltd & Another
• L'Estrange Vs F Graucob Ltd
• Uganda Telecom Ltd Vs ZTE Corporation
• Kammins Ballrooms Co. Ltd Vs Zenith Investments (Torquay) Ltd
• Yonasani B. Kanyomozi Vs Motor Mart (U) Ltd
• Mujuni Ruhemba Vs Skanka Jensen (U) Ltd
• Laura Kinalwa Vs Compuscan CRB Limited
• Luzinda Marion Babirye Vs Ssekamatte (Alias Mulwana Samuel) & Others
• Agri-Industrial Management Agency Ltd Vs Kayonza Growers Tea Factory Ltd & Igara Growers Tea Factory Limited

Key Disputed Contract Clauses

• The court determined whether the defendant was entitled to retain the USD 7,656 security deposit, finding no evidence of property damage requiring its use.
• The court assessed whether the parties could vary the lease orally or through conduct, as the defendant argued clause 43 required written modifications, while the plaintiff claimed an implied variation through mutual acceptance of USD 4,000 payments.
• The court analyzed the original monthly rent of USD 7,656 and the disputed reduction to USD 4,000, including whether the defendant's acceptance of USD 4,000 payments constituted a valid variation or waiver of the original terms.
• The court evaluated specific clauses (e.g., failure to complete the mall, unauthorized alterations) to determine which party breached the agreement, ultimately finding the defendant breached by wrongful eviction and property confiscation.
• The court examined allegations that the defendant levied service charges and VAT twice, and whether the plaintiff's failure to pay these as per the original agreement constituted a breach.

Cited Statute

• Evidence Act, Cap. 8
• Contracts Act, 2010
• Civil Procedure Act, Cap. 282

Judge Name

Passage Text

• In the premises, the Plaintiff did not breach the Lease (Tenancy) Agreement however, the Defendant breached the same when it issued an eviction/demand notice. The Defendant also wrongfully evicted the Plaintiff, confiscated and converted its properties.
• In conclusion, the Plaintiff is hereby awarded special damages of USD 131,257 (United States Dollars One Hundred Thirty One Thousand Two Hundred Fifty Seven Only) comprising of USD 123,601 for the fittings and fixtures and USD 7,656 being the security deposit fee and UGX 99,320,856/= (Uganda Shillings Ninety Nine Million Three Hundred Twenty Thousand Eight Hundred Fifty Six Only) comprising of UGX 52,800,000/= for accommodation and locally procured materials and UGX 46,520,856 for the stock that was confiscated by the Defendant.
• In the premises, the Plaintiff did not breach the Lease (Tenancy) Agreement however, the Defendant breached the same... the counterclaim fails.

Damages / Relief Type

• Declared that the Defendant breached the Lease (Tenancy) Agreement.
• USD 131,257 in special damages (USD 123,601 for fixtures and fixtures, USD 7,656 for security deposit refund) with 20% annual interest from filing date to payment in full.
• UGX 30,000,000 in exemplary/punitive/aggravated damages with 6% annual interest from judgment date to payment in full.
• Declared that the Plaintiff is not indebted to the Defendant in rental arrears as claimed or at all.
• Costs of the suit awarded to the Plaintiff.
• UGX 99,320,856 in special damages (UGX 52,800,000 for accommodation and materials, UGX 46,520,856 for confiscated stock) with 20% annual interest from filing date to payment in full.
• UGX 70,000,000 in general damages with 6% annual interest from judgment date to payment in full.