[2025] UGCommC 131

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) MISC. APPLICATION NO. 831 OF 2025 (ARISING FROM CIVIL SUIT NO. 385 OF 2025)**

10 **ABRYANZ COLLECTION LTD :::::::::::::::::::::::::::::::::::::::::: APPLICANT**

#### **VERSUS**

**YASHEEN RATANSHI :::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

## **BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA** 15 **RULING**

#### Introduction

This application was brought by way of Notice of Motion under **Order 36 rule 4** and **Order 52 rules 1 and 3 of the Civil Procedure Rules, SI 71- 1,** seeking orders that:

- 20 1. The Applicant be granted unconditional leave to appear and defend *Civil Suit No. 385 of 2025*. - 2. Costs of this application be provided for.

### Background

The background of this application is detailed in the affidavit in support

25 deponed by **Mr. Brian Ahumuza** the Applicant's Managing Director, and is summarized below:

1. That on 1st August, 2023, the Applicant and the Respondent executed a tenancy agreement in respect of property comprised in FRV 1297 Folio 12 Plot 13 at Bukoto Street (Kololo Hill) Kyadondo,

- 5 Kampala (the suit premises) for purposes of operating a fashion boutique. - 2. That in the said agreement, the parties agreed that the Applicant could develop and improve the suit premises provided it obtained the necessary approvals. - 10 3. That upon inspection by KCCA officials, the suit property was condemned and deemed unfit for purpose and it was directed that the same be demolished and a new building set up. Further, that the Applicant was issued with a building permit for the erection of a new building on 25th November, 2024. - 15 4. That the Applicant paid the Respondent USD 20,000 as advance rent, which has not been utilized. - 5. That therefore, the Applicant cannot use the suit premises for the intended purpose and as such, cannot pay rent for the same. - 6. That there exists serious triable issues which can only be disposed - 20 of if the Applicant is granted unconditional leave to appear and defend the suit.

In reply, the Respondent **Mr. Yasheen Ratanshi**, opposed the application contending that:

- 1. The Applicant's obligation to pay rent was not conditional on it 25 obtaining approvals from KCCA and that this was well known to the Applicant. - 2. The Applicant has been paying the rent. - 3. It is clear that the Applicant had an obligation to pay rent despite the developments or changes the Company was to carry out on the 30 suit property.

#### 5 Representation

The Applicant was represented by Learned Counsel Pearl Maria Bekunda of **M/s Muwema & Co. Advocates and Solicitors** while the Respondent was represented by Learned Counsel Stephen Zimula and Learned Counsel Cyrus Mpagi of **M/s MMAKS Advocates**.

- 10 Issues for Determination - 1. Whether the Applicant has raised sufficient grounds to warrant the grant of unconditional leave to appear and defend *High Court Civil Suit No. 385 of 2025*? - 2. What remedies are available to the parties?

### 15 Resolution

Issue No. 1: Whether the Applicant has raised sufficient grounds to warrant the grant of unconditional leave to appear and defend *High Court Civil Suit No. 385 of 2025*?

### Analysis and Determination

- 20 I have taken into consideration the affidavit in support of the application and the affidavit in reply. On 28th May, 2025, when the matter came up for hearing, Learned Counsel for both parties made oral submissions. I have not seen the need to reiterate the submissions herein, but I have considered the same before arriving at my decision. - 25 **Order 36 rule 3(1) of the Civil Procedure Rules**, stipulates that a Defendant served with summons, issued upon the filing of an endorsed plaint and affidavit under rule 2 of this Order endorsed, "Summary procedure", shall not appear and defend the suit except upon applying for, and obtaining leave from Court.

5 It is now trite that for leave to appear and defend a summary suit to be granted, an Applicant/Defendant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law.

A triable issue is one capable of being resolved through a legal trial, that is, a matter that is subject to or liable to judicial examination in Court. It 10 has also been defined as an issue that only arises when a material proposition of law or fact is affirmed by one party and denied by the other. (See: *Jamil Ssenyonjo Vs Jonathan Bunjo Civil Suit No. 180 of 2012*).

It is also trite that a defence raised by the Applicant should not be averred in a manner that appears to be needlessly bald, vague, or sketchy. If the

- 15 defence is based upon facts, in the sense that material facts alleged by the Plaintiff in the plaint are disputed or new facts are alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether or not there is a balance of probabilities in favour of one party or the other. - 20 In essence, where the Applicant raises a good defence, the Plaintiff is barred from obtaining summary judgment. Furthermore, in the case of *Maluku Interglobal Trade Agency Ltd Vs Bank of Uganda [1985] HCB 65*, Court noted that in such a case:

*"The Defendant is not bound to show a good defence on the merits but* 25 *should satisfy the Court that there was an issue or question in dispute which ought to be tried and the Court shall not enter upon the trial of issues disclosed at this stage."*

In the instant case, according to the pleadings, the Respondent vide a summary plaint, instituted *High Court Civil Suit No. 385 of 2025* 30 against the Applicant seeking to recover USD 33,200 being rent arrears,

5 rent for the period after 31st March, 2025 and interest thereon, an order for vacant possession and costs of the suit.

It is undisputed that on 1st August, 2023, the parties executed a tenancy agreement, as evidenced by annexure **"A"** attached to the affidavit in support of this application in respect of property comprised in **FRV 1297**

10 **Folio 12 Plot 13 Bukoto Street (Kololo Hill) Kyadondo, Kampala**, the suit premises.

Learned Counsel for the Applicant averred that after the execution of the agreement; upon inspection by KCCA, the premises were condemned as unfit for proper use. Learned Counsel further contended that, the 15 Applicant has never used the premises and thus, is not liable to pay the rent. That the payment of USD 20,000 in rent was out of good will in anticipation of using the premises, which has not happened yet.

On the other hand, Learned Counsel for the Respondent submitted that as per the agreement, it was agreed that the Applicant would, at its cost 20 and risk, upgrade and remodel the building depending on its preferences if it so wished. Further, that it was also agreed that the Applicant would pay rent after the grace period; that is; from 1st August, 2023 to 31st October, 2023. Further, that the Applicant was to pay a subsidized monthly rental amount from 1st November, 2023 to 31st January, 2024 25 and thereafter would pay a monthly rent of USD 3,200 exclusive of VAT. That the Applicant made the monthly payments until it started defaulting.

As per **clause 1** of annexure **"A"**, the tenancy agreement, the Respondent agreed to let the suit premises to the Applicant for 4 years from 1st August, 2023, until 31st July, 2027. Thereunder, it was also agreed that the 30 Applicant would be granted a 3 months' grace period so as to prepare and set up the premises at its cost, thereafter, the Applicant was to pay a

5 subsidized amount for rent until 31st January, 2024 and with effect from 1st February, 2024, it would pay the full rent amount of USD 3,200 per month exclusive of VAT.

**Clause 1** of the tenancy agreement provides that:

*"It is agreed and stated the tenant will invest a sum of close to USD* 10 *100,000 between 1st August, 2023 and January 31st 2024 of his own funds, at his own costs, to retrofit the property, including the re-doing and upgrading mechanical and electrical elements of the building, aesthetics improvements, and some approved structural and other improvements as may be deemed necessary. This investment is not* 15 *reimbursable or refundable by the landlord and will be made at the tenant's own risk, cost and liability."*

The Applicant does not dispute being in current possession of the premises but avers that it is not liable to pay the rent since the premises were condemned and deemed unfit for use by KCCA and that the rent that was 20 paid, was in anticipation of using the premises which has not occurred. In evidence, the Applicant adduced an email from a one Sekadde Ezra dated 14th August, 2024, annexure **"G".** According to annexure **"G"**, Sekadde Ezra after inspection of the premises recommended that the building be demolished and a new one be constructed.

25 According to annexures **"F"** and **"H"** attached to the affidavit in support, the notification of approval dated 13th June, 2024 and the building permit in respect of the suit property dated 25th November, 2024 respectively, KCCA approved the development of the suit premises and a building permit was issued to that effect. 5 I have observed that the Applicant paid some money for rent for some months and despite being informed about the state of the suit premises and the need to have the building demolished, the Applicant stayed in possession and even paid the rent on 22nd August, 2024 as per the receipts, annexure **"B"** attached to the affidavit in reply. According to the 10 said receipts, the Applicant paid the security deposit on 14th July, 2023 and was paying the monthly rent until 22nd August, 2024 as per receipt **No. 206**. According to receipt **No. 205**, rent for the period up to April, 2024 of USD 1,700 was paid. Further, according to receipt **No. 206**, the Applicant made payment of USD 2,000 for the months of May, 2024 to 15 October, 2024, leaving a balance of USD 17,200. The receipts clearly

Further, as per annexure **"A"** attached to the affidavit in reply, a letter dated 4th October, 2024 from the Applicant to the Respondent, the Applicant offered to purchase the suit premises from the Respondent. 20 Therein, the Applicant agreed to pay rent until January, 2025, but suggested that if they were granted a loan, the said rent fee would be considered as an advance payment for the purchase of the suit premises

indicate that the amounts are for rent, for the respective periods.

and that if the loan conclusion was unsuccessful, then the amount would be considered as rent for the same period.

25 From the above conduct, it can be deduced that the Applicant agreed to pay rent even after KCCA's notification and was aware of its rental obligation. Though, the Applicant contended that the premises were not fit for purpose, **clause 1** paragraph 2 of the tenancy agreement provides that a grace period was granted to the tenant to enable it prepare and set up 30 the place at its own cost, to the required standard, provided the tenant obtained necessary written approval from the relevant city authorities,

- 5 consents from the landlord and ensure that the structural integrity of the building is maintained. Further, according to **clause 1** paragraph three of the agreement, the parties agreed that the Applicant would pay a subsidized rental amount to enable it continue to prepare and set up the place at its own cost to its required standard. - 10 In view of the above, it is clear that the Applicant undertook to obtain approvals from the city authorities for any adjustments and that it would remodel the place at its own cost. In the premises, the Applicant's contention that it could not use the premises for the intended purpose and therefore not pay rent is not a defence that warrants granting leave to 15 appear and defend the suit. It is clear from the tenancy agreement that the obligation to pay rent was not conditioned on the Applicant's obtaining approvals from city authorities like KCCA. Further, it should be noted that the Applicant indeed paid rent for some months and receipts were issued - 20 In addition, according to annexure **"A"**, a letter dated 4th October, 2024, attached to the affidavit in reply, the Applicant expressed interest to purchase the property for redevelopment and further stated therein that:

as per annexure **"B"** attached to the affidavit in reply.

*"While we are still pursuing the abovementioned process with the bank (in 2 above), we agree to be paying rent for the property for* 25 *the entire period until Jan 2025 (ample time to conclude the loan discussions with the Bank) but at its successful conclusion, this rent shall be considered as the advance payment against the land purchase value or amount. However, in the case that the process is unsuccessful, then this amount shall be considered as rent for* 30 *the same period." (Emphasis mine).*

- 5 Accordingly, from the above it is clear that the Applicant was aware of the rent obligation and further made a proposal for consideration of the rent payments. Further, as per annexure **"A"** of the affidavit in reply, the Applicant updated the Respondent on the progress of the developments on the premises. - 10 In the circumstances, I find that the Applicant has not raised any triable issue of fact or law to warrant the granting of leave to appear and defend the main suit since it retained possession of the suit premises and did not pay the outstanding rent.

As was held in the case of *Twentsche Overseas Trading Co. Ltd Vs*

15 *Bombay Garage [1958] EA 741*, summary procedure is only resorted to in clear and straightforward cases where the demand is liquidated and there are no issues for determination by the Court except for the grant of the claim.

In view of the above, I am therefore convinced that the Applicant is 20 indebted to the Respondent in the sum claimed in the plaint of USD 33,200 being rent arrears as of 31st March, 2025, and the period after 31st March, 2025, since it is still occupying the suit premises.

Accordingly, this issue is answered in the negative.

Issue No. 2: What remedies are available to the parties?

25 This Court having found issue No. (1) above in the negative, further finds that this application for leave to appear and defend is devoid of merit.

It is settled law that summary procedure provides a quick way for the Plaintiff who demands a liquidated sum to obtain judgment where there is no evident defence. (See: *Post Bank (U) Limited Vs Abdu Ssozi, SCCA*

## 5 *No. 8 of 2015*, and *Ndibazza Naima Vs Acacia Finance Limited HCMA No. 1144 of 2014.*

Accordingly, this application is dismissed, and the Respondent/Plaintiff is entitled to a Decree under **Order 36 rule 5 of the Civil Procedure Rules**.

In its plaint, the Respondent also sought to recover the rent for the period 10 after 31st March, 2025, interest, an order for vacant possession and costs of the suit.

a) Vacant possession

**Section 44 of the Landlord and Tenant Act, Cap. 238** provides for vacation of premises on termination of a tenancy. Also, **clause 5(a)** of the 15 tenancy agreement is to the effect that the landlord has the right to evict the tenant or repossess the premises if the rent is due for a period of 15 days or more.

In the circumstances, since the Applicant is still in possession of the premises but refuses to pay the rent due, then it is only fair and just that 20 it hands over vacant possession of the premises to the Respondent. I hereby order that the Applicant/Defendant gives vacant possession of the suit premises to the Respondent/Plaintiff.

b) Rent after 31st March, 2025

The Applicant did not dispute being in possession of the premises at the 25 time of hearing of the application. Accordingly, the Respondent is also entitled to the rent for the period after 31st March, 2025 until the Applicant hands over vacant possession of the premises to the Respondent.

## 5 c) Interest

**Section 26(2) of the Civil Procedure Act, Cap. 282**, is to the effect that the Court has the discretion to award interest. As was held in the case of *Milly Masembe Vs Sugar Corporation (U) Ltd and Another SCCA No. 1 of 2000*, the guiding principle is that interest is awarded at the discretion

10 of the Court, but the Court should exercise the discretion judiciously, taking into account all the circumstances of the case.

Under **clause 2(b)** of the tenancy agreement, the parties agreed to a 10% late fee. It is not stated whether this was a monthly penalty. However, the important consideration to be made is that the parties had agreed on a

- 15 late payment charge and awarding interest on the outstanding sums is an appropriate remedy in my considered view. I accordingly award interest at the rate of 18% per annum on the rent arrears from the date of default until payment in full. - d) Costs of the suit - 20 **Section 27(2) of the Civil Procedure Act** provides that costs of any cause follow the event unless otherwise ordered by Court. In the case of *Uganda Development Bank Vs Muganga Construction Co. Ltd [1981] HCB 35,* **Hon. Justice Manyindo** (as he then was) held that:

*"A successful party can only be denied costs if it is proved, that but* 25 *for his or her conduct, the action would not have been brought, the costs will follow the event where the party succeeds in the main purpose of the suit."*

The Respondent/Plaintiff being the successful party in this case is therefore entitled to costs of this suit.

- 5 Accordingly, Judgment is hereby entered for the Respondent/Plaintiff against the Applicant/Defendant in the following terms: - 1. The Applicant/Defendant shall pay the Respondent/Plaintiff USD 33,200 (United States Dollars Thirty Three Thousand Two Hundred Only) in *High Court Civil Suit No. 385 of 2025,* being the rental 10 arrears as of 31st March, 2025. - 2. The Applicant/Defendant shall pay the Respondent/Plaintiff the rent due for the period after 31st March, 2025 until the Applicant/Defendant hands over vacant possession of the suit premises to the Respondent/Plaintiff. - 15 3. The Applicant/Defendant shall give vacant possession of the suit premises to the Respondent/Plaintiff. - 4. The Applicant/Defendant shall pay interest on the sums in (1) and (2) above at the rate of 18% per annum from the date of default until payment in full. - 20 5. The Respondent/Plaintiff is awarded the costs of this application and the suit.

I so order.

Dated, signed and delivered electronically via ECCMIS this **5th** day of **June**,

**2025.**

Patience T. E. Rubagumya **JUDGE** 5/06/2025 6:45am

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