[2024] UGHCCD 166

## **THE REPUBLIC OF UGANDA**

## **IN THE HIGH COURT OF UGANDA AT KAMPALA**

## **CIVIL DIVISION**

### **CIVIL APPEAL NO. 0053 OF 2023**

**FORTE CONCRETE LIMITED:::::::::::::::::::::::::::::::::::::::::::::::::APPELLANT**

## **VERSUS**

#### **1. MUWANGA ALEX BOAZ**

# **2. KAYIRA CHARLES LWANGA::::::::::::::::::::::::::::::::::RESPONDENTS** *(The beneficiaries of the Estate of the Late Lwanga John Stanley)*

### **BEFORE: HON. JUSTICE SSEKAANA MUSA**

#### **JUDGMENT**

## *Background*

The appellant entered into a tenancy agreement with the late Lwanga John Stanley the registered proprietor of the land comprised in Kyadondo Block 185 Plot 10298 at Butenga- Kira, Namugongo measuring approximately 2.97 hectares. The respondents are the children of the late Lwanga John Stanley. The terms of the agreement were to the effect that the appellant would pay a monthly rent of UGX 500,000 per month payable yearly in advance for the initial year and subsequently one month in advance.

The tenancy commenced on 1st May 2018 and was for a period of five years. The appellant was permitted to use the premises for the manufacture of concrete products and other building or construction materials with the aid of temporary structures. The appellant's tenancy expired on the 30th of April 2023. The late Lwanga unfortunately passed away before the said agreement could be renewed.

The advocates of the estate issued a notice of termination of the tenancy to the appellant on the 3rd day of May 2023. The respondents filed Miscellaneous Cause No. 036 of 2023 against the appellant seeking for among others that the Appellant vacates the premises due to the expiry of the tenancy.

The appellant contended that before the expiry of tenancy agreement and on or about December 2022 started interrupting the appellant saying that they sold the land and it needed to leave the premises. They contended that when the interruption and harassment continued, the appellant hired private security guards to guard the premises which was expensive for the appellant forcing them to issue a notice of termination dated 27th April 2023. The appellant contended that this gave them 12 months to prepare and leave the premises. In a turn of events, the respondents through their lawyers issued seven days' notice dated 3rd May 2023 to vacate the premises which contrary to the tenancy agreement claiming that the tenancy had expired. The appellant insisted on their right to 12 months' notice which was denied by the respondent.

It was after the lapse of seven days that the respondents sued the appellant in the lower Courts for orders that the appellant vacate the land. The matter was heard interparty and the Appellant raised three preliminary points of law that is;

- 1) The Court had no jurisdiction to entertain such a matter as is required by Landlord Tenant Act, 2022 - 2) The Respondents lacked locus to institute the application. - 3) The Applicants were estopped from bringing the application.

The trial Chief Magistrate Her Worship Nsenge Roseline overruled the preliminary points of law and determined the matter on its merits. She ruled that the Applicants were not in breach of the tenancy agreement stating the same had not been terminated but rather elapsed at the end of the tenancy period. She ordered that the respondent give vacant possession of the land with immediate effect.

This is an appeal from the decision of Her Worship dated 6th July 2023 brought on the following grounds;

- *1. The learned trial Chief Magistrate erred in law and fact when she ordered that the Respondent should vacate the property without due consideration of the terms and conditions of the tenancy agreement.* - *2. The learned trial Magistrate erred in law and fact when she failed to properly evaluate evidence thereby reaching a wrong conclusion that the Applicants are not in breach of the tenancy agreement.* - *3. The learned trial Chief Magistrate erred in law and fact when she held that the Respondent's tenancy agreement elapsed and that it was irrelevant to consider the twelve months' notice thereby causing a miscarriage of justice.* - *4. The learned trial Chief Magistrate erred in law and fact when she applied the Landlord Tenants Act of 2022 to resolve a dispute arising out of a tenancy agreement of 2018 thereby reaching a wrong decision thus causing a miscarriage of justice.* - 5. *The learned trial Chief Magistrate erred in law and fact when she held that it was conclusive that the Applicants being beneficiaries of the undivided estate had locus to institute legal proceedings in a bid to protect the undivided interest in the estate.*

The appellant prayed that the appeal be allowed, the Judgment of the Court dated 6th July 2023 be set aside and the Appellant be granted costs of this appeal.

The appellant was represented by *Counsel Christian Muganzi* and *Counsel Sharon Bakarwera* while the respondent was represented by *Counsel Mudde John Bosco*

The parties filed submissions that were considered in this Judgment.

# *Determination of Appeal*

I will adopt the order in which the Appellants resolved their grounds of appeal.

# **Ground 5:**

*The learned trial Chief Magistrate erred in law and fact when she held that it was conclusive that the Applicants being beneficiaries of the undivided estate had locus to institute legal proceedings in a bid to protect the undivided interest in the estate.*

The learned trial Chief Magistrate noted that the landlord had died intestate and there was no evidence to show that the late Lwanga John Stanley got a representative under Section 2(a) & 190 of the Succession Act Cap. 162 as amended.

The learned trial Magistrate ruled;

*"… the Applicants are descendants of the Late Lwanga John and basing on the authorities within the precincts of Section 27 of the Succession Act Cap 162 have right to sue in the preservation of their undivided interest in the deceased property.*

*… Applicants being the beneficiaries of the undivided estate, they have locus to institute proceedings in a bid to protect their undivided interest in the estate"*

The appellants' counsel submitted that the principal in dealing with the estate of the deceased is that one should be a representative of the deceased person. Counsel argued that a beneficiary of an estate had a right to sue to prevent the estate of the deceased from being wasted. Counsel cited *Kabwa v Martin Banoba Musinga SCCA No. 52 of 1995* in support of his position.

They contended that was in contention was that this was a business transaction and not wastage of suit premises. The reason why the appellant could not pay rent without an order directing it to be paid in court as there was no legal representatives of the deceased and there were more than two beneficiaries asking for rent excluding the surviving spouse who gave legal consent when parties were entering into tenancy agreement. That is the reason the court order was sought that rent be paid in this court and same has been fully paid as directed/ordered by court.

The agreement is binding on the representatives' assignees in title as indicated in the recitals of the tenancy agreement and under paragraph and under paragraph 9(a) of the affidavit in reply of the Miscellaneous Cause No. 036 of 2024. Paragraph 2 and 3 of the affidavit in support of notice of motion, the respondents state that they are beneficiaries of the deceased father and they did not prove to court that the appellants had subjected the estate to waste rather under paragraph 8 of their affidavit in support of notice of motion/ application they stated that "in order to properly administer the estate of our late father we… as beneficiaries notified the respondent that we did not intend to renew the tenancy agreement." In response the appellant under Paragraph 4(a) and Paragraph 9(a) the Appellant rejected to the locus standi of bringing such suit when the estate was never put to waste.

Counsel submitted that the trial Chief Magistrate misinterpreted the law, ignored the illegal actions/ intermeddling and intentions and granted the prayers of the Respondents in the absence of evidence to show that indeed the appellant had subjected the estate to waste or putting the suit property to danger.

The appellant's submission was that such an illegality would not have been entertained by the lower court in the first instance unless the property was put to waste by the tenant. In the absence of such representation, the tenancy would continue until the representative of the landlord determined it.

Counsel prayed that the court finds since the tenancy agreement affected the personal representatives, successors in the title and assignees that court find that the two beneficiaries had no locus to institute a suit of such nature in courts of law. This was an illegality which should not be condoned by courts of law. That condoning this would be encouraging intermeddling at the expense of the innocent beneficiaries including the surviving spouse who gave in her legal consent when the deceased husband was entering into this tenancy agreement.

On the other hand, counsel for the respondents submitted that the respondents being sons and beneficiaries of the estate of the late Lwanga John Stanley within the meaning of Section 27 of the Succession Act have a right to sue for the preservation of their late father's estate.

It was submitted that they had not yet obtained Letters of Administration to the estate of their late father Lwanga John Stanley but that they needed to protect and preserve their late father's estate since the Appellant's tenancy had expired and the latter was resisting to vacate the premises. Counsel cited the case of **Israel Kabwa v Martin Banoba SCCA No. 52 of 1995 the Supreme Court** held that a beneficiary of an estate of an intestate has capacity to sue in his own names to protect the estate for his benefit without first taking out letters of administration.

Counsel prayed that the Court uphold the finding of the learned trial Chief Magistrate on this issue.

## *Analysis*

The appellant's counsel argued that this right to sue was only available in cases where the estate was being wasted which was not happening in this instance. I find this argument weak and flawed since the respondents sued the appellant in a bid to protect the estate from the appellant who had refused to give vacant possession upon the lapse of their tenancy agreement. Refusal to give vacant possession was endangering the estate of the Late Lwanga therefore the respondents had a right to sue to preserve.

Where the estate has no administrators and it being put to waste, prudence demands that such estate should be protected from being wasted and this is the position that was adumbrated in the case of *Israel Kabwa v Martin Banoba SCCA No. 52 of 1995***.** Such beneficiary who goes to court should not act unilaterally against the interests of members of the family. The major and sole purpose should be to preserve the estate otherwise it would be absurd if the entire family could look on without taking an effort to save the estate from being wasted. Every member of a land owning family can file a suit to protect the property of the family from waste and dissipation.

The court should not deprive a beneficiary of his rights in an estate which is being put to waste or grabbed by non-beneficiaries like in the present case. The appellant who is not a member of the family and was in full benefit cannot question the locus of family members who are challenging their continued usage of the land upon expiry or lapse of the contract period upon death of the lessor. Any member of the family whose interest is threatened by the wrongful alienation or wrongful interference with family property, can sue to protect his interest, whether with or without the consent of the other members of the family. See *Ezekude v Odogwu (2002) 8 NWLR (pt 784) p 366 at 373*

Actions brought by persons who would be beneficiaries in the administration are not defeated, either where the person entitled to obtain letters is plaintiff or where such person is made a defendant, because a grant has not been made at the date of the writ. The action is brought to protect the estate especially if the suit is brought by a person who would be a beneficiary in the administration, there would be no objection on ground that a grant had not been issued. See *Ingali v Moran [1944] 1 All ER 97 at 103.*

An administrator derives his title from the grant of letters of administration; the deceased's property does not vest in him until such grant. In order to prevent injury to a deceased's estate Parliament and the courts adopt the doctrine that upon the grant being made the title of the administrator relates back to the time of death. Where a person died intestate leaving many beneficiaries behind, his property will devolve on the beneficiaries and will become communal or family property of all the members. See *Mohammed v Klargester (Nig) Ltd (2002) 14 NWLR (pt 787) p 335 at 362*

The respondents as children of late Lwanga had every right to sue even though they had not obtained letters of administration. Each of the deceased children is a natural beneficiary to the estate of the deceased and can sue to protect the estate of their father. The property of the estate should not be left to waste even in the presence of the children of deceased. It is right that before the grant of letters of administration the children of the deceased should protect the property of their father. See *Otukpo v John [2000] 8 NWLR (pt 669) 507*

I therefore agree with the ruling of Her Worship that the respondents have the right to sue in preservation of their undivided interest in the estate.

## **Grounds One and Three**

*The learned Trial Chief Magistrate erred in law and fact when she ordered that the respondent should vacate the property without due consideration of the terms and conditions of the tenancy agreement.*

*The learned Trial Chief Magistrate erred in law and fact when she held that the respondent's tenancy agreement elapsed and that it was irrelevant to consider the twelve months' notice thereby causing a miscarriage of justice.*

Paragraph 5 of the Tenancy Agreement stated that;

5.1 *"Either party can terminate the tenancy hereby granted on grounds of nonpayment of rent, operational losses, and breach of the terms and conditions of the agreement. If the tenant exercises this right, they shall give to the land lord twelve (12) months' written notice to such desire to terminate the tenancy or rent in lieu of notice. If the land lord exercises right, they shall give the tenant 12 months' written notice of such desire to terminate the tenancy"*

5.2 *"If either party desires to terminate the tenancy for other reasons than those stated in 5.1, they will give twelve (12) months' notice in writing to the other party. This shall be done after a minimum of a 5- year period and in this case, the parties need not to state any reasons for termination"*

Counsel for the appellant interpreted this provision to mean that the parties were free to terminate their tenancy for other reasons other than reasons stated under paragraph 5.1 which include; non-payment of rent, operational losses, and breach of terms and conditions of the agreement. The provision made it mandatory that even if one wanted to terminate on other grounds or after expiration of the term and the parties desire not to renew the

tenancy, 12 months of written notice to the person desiring not to continue or renew was expected.

Counsel submitted that Trial Chief Magistrate at page 16 paragraph one (1) of the judgment where she stated;

*"…in this case, the tenancy agreement and 12 months' notice would have been relevant if either party had prematurely terminated the tenancy during the five-year tenancy period which was not the case here. The tenancy period in this case merely elapsed."*

She went ahead to state at page 16 and paragraph (2) of her judgment that, the respondents were not in breach, because the tenancy had lapsed and that… the respondent's letter dated 27/04/2023 was in bad faith and intended to derail the applicants from seeking for vacant possession… when a tenancy lapses, it's upon the landlord to determine whether they intend to enter into a fresh tenancy or not.

The appellant argued that the respondents gave notice after the expiry of the tenancy agreement, the respondent canceled and only gave seven days' notice after the expiry of the tenancy agreement which was contrary to the tenancy agreement without proving that there was a breach of the clauses of the tenancy agreement which meant that they had formed their mind on 3/5/2023 not to renew the tenancy agreement which required them to give 12 months' notice to the appellant. The appellant argued that they should have given notice of 12 months uninterrupted to enable the appellant to plan and get another place to rent.

Counsel for the appellant then delved into the ambiguity of the tenancy agreement stating that the clause on the termination notice was ambiguous. Counsel submitted that it was not clear on when the tenant or landlord can give notice of termination hence ambiguous and that any ambiguity clause should be interpreted with the meaning that is most in favour of the party that did not draft or request the clause in this case the appellant. Counsel argued that this meant that any time one formed up their mind, they would give notice and the 12 months would start running.

Counsel further submitted that the procedure for the determination of the tenancy was well-catered for and death was not one of the grounds of determination. He also argued that the alleged beneficiaries of the Landlord were also bound by the tenancy agreement.

Counsel concluded that the trial Chief Magistrate ignored all of this and ruled that the issue before the court was no one of termination but rather lapse of the tenancy agreement which was a wrong interpretation which led to the miscarriage of justice and the same should set aside and appeal allowed.

The appellant also contended that the respondents had breached the tenancy agreement when they sold the premises, trespassed and harassed the appellant before the period the tenancy could elapse necessitating them to hire private security guards to guard the premises. Counsel submitted that the Appellant was entitled to compensation since they suffered great inconvenience by putting it operational losses and unnecessary expenses of hiring security guards to guard its properties from being destroyed until they secured a court order.

Counsel invited the Court to find that this was a fit and proper case which the Appellant should be compensated as per the valuation report.

In response, Counsel for the Respondents submitted that the question for determination by this Court was whether or not the tenancy had expired on the 30th of April 2023. The Respondents contended that the Appellant had executed a tenancy agreement with the late Lwanga John Stanley which commenced on the 1 st of May 2018 for a fixed term of five years. Counsel cited Clause 2.1 of the agreement provided that "the tenancy hereby created shall be for a period of five (5) years effective the commencement date of this contract and the same shall be subject to renewal on such terms and conditions as shall be mutually agreed upon by the parties"

Counsel submitted that the tenancy technically expired on the 30th April 2023 when the five years elapsed and that whereas there was a provision that allowed renewal upon mutual consensus the same had not happened since the Landlord had unfortunately passed away in December before any negotiations in that regard were held. Counsel concluded that being a fixed term contract, the same automatically lapsed at the expiry of the five contractual years and was never renewed. Clause 2.2 provided that upon there was actually no need of a termination notice.

Counsel further submitted that the second issue for determination was whether the Appellant could in the circumstances of the tenancy proceed and invoke the provisions requiring Notice of Termination provided under Clause 5 of the agreement.

The respondents contended that the provisions of Clause 5.1 and 5.2 became legally moot upon the expiry of the tenancy and could not be invoked by the Appellant since they were only applicable during the pendency of the tenancy and provided for situations where the tenancy could be terminated namely; non-payment of rent, operational loss and breach of the terms of the agreement.

Clause 5.2 provided that for any other reasons for termination then the other party was entitled to twelve months' notice which was to apply only in situations where there was renewal of the tenancy after expiry of the first five years.

It was the respondents' contention that Clause 5.2 was also not available to the appellant and was inapplicable in the circumstances since the tenancy had expired and was not renewed.

Counsel argued that the Appellant could not at this stage raise issues to do with breach of a tenancy agreement that already expired and should simply vacate the premises having overstayed their welcome more than a year.

Counsel invited the Court to uphold the ruling of the learned Trial Chief Magistrate and order the Appellant to vacate the premises.

### *Analysis*

The relationship between landlord and tenant is essentially contractual in character, the relevant law has been continually moulded by both common law and statute. Naturally, a tenancy for a fixed term terminates automatically by effluxion of time.

The tenancy agreement provided as follows;

*"The tenancy hereby created shall be for a period of five (5) years effective the commencement date of this contract and the same shall be subject to renewal on such terms and conditions as shall be mutually agreed upon by the parties.*

*Upon expiry of the tenancy, may review the terms and conditions for renewal."*

The said tenancy was supposed to be renewed upon mutual agreement by the parties and in this case there was no mutual agreement upon death of the landlord. The appellant ought to have engaged the successors in title for purposes of mutual agreement for extension of the tenancy.

This clause did not create an automatic renewal of the tenancy in absence of mutual agreement that would have facilitated review of the terms and

conditions for renewal. The respondents' obligation to grant the appellant a new tenancy never arose. The conditions for renewal were never satisfied because the parties never engaged or met to mutually agree on the possibility of renewal before the effluxion of time.

Until and unless all the conditions in the option to renew were satisfied, the appellant had no entitlement to a new tenancy from the respondents or the Administrators of the Estate of the late Lwanga. The appellant had to act vigilantly in pursuit of the renewal in spite of the death of the land, since they were on notice that upon expiry of the tenancy period of five years as agreed upon mutually, there would be no tenancy. There was no express obligation in the terms of the option requiring the respondent/landlord to act in good faith generally in connection with the appellant's option to renew or more specifically negotiating new terms and conditions. See *AREIF (Singapore I) Pte Ltd v NTUC Fairprice Co-operative Ltd [2015] 2 SLR 630*

Ugandan law does not recognise a general duty of good faith implied in contracts. Parties in an existing contractual relationship thus retained the freedom to perform their contractual obligations in their own self-interest and in a manner which maximized their benefit, subject only to the limits imposed by the general law. The appellant should not blame the respondents' family for the failure to see through the renewal of the contract, the burden lay on their shoulders to ensure that the tenancy is renewed before expiry of the 5 years. See *Ng Giap Hon v Westcomb Securities Pte Ltd [2009] 3 SLR (R) 518*

The learned trial Chief Magistrate at page 16 paragraph one (1) of the judgment where she stated;

*"…in this case, the tenancy agreement and 12 months' notice would have been relevant if either party had prematurely terminated the tenancy during the five-year*

## *tenancy period which was not the case here. The tenancy period in this case merely elapsed."*

She went ahead to state at page 16 and paragraph (2) of her judgment that, the Respondents were not in breach, because the tenancy had lapsed and that… the Respondent's letter dated 27/04/2023 was in bad faith and intended to derail the Applicants from seeking for vacant possession… when a tenancy lapses, it's upon the landlord to determine whether they intend to enter into a fresh tenancy or not.

I have analyzed the evidence on record and I agree with the ruling of the learned trial Chief Magistrate. It is quite unfortunate for the Appellants that the Late Lwanga John Stanley died before renewing the tenancy agreement. The Appellants could not invoke Clause 5.1 and 5.2 of the tenancy agreement upon the expiry of their agreement since the same only applied to instances where the Landlord or Tenant chose to terminate the tenancy agreement before its expiry.

In this case, the beneficiaries of the estate and/or the potential new landlords chose not to renew the tenancy of the Appellant which was well within their rights. The renewal or option to renew had to be exercised before the expiry of the fixed term by mutual agreement between the landlord and tenant. The tenancy automatically came to an end by effluxion of time. See *Soup Restaurant Singapore Pte Ltd YES F & B Group Pte Ltd [2014] SGHC 246*

The learned trial Chief Magistrate was therefore right in finding that it was irrelevant to consider the 12 months' notice since the contract had elapsed and ordered the Appellant to give vacant possession immediately.

#### **Ground four:**

*The learned Trial Chief Magistrate erred in law and fact when she applied the Landlord Tenants Act of 2022 to resolve a dispute arising out of a tenancy agreement of 2018 thereby reaching a wrong decision thus causing a miscarriage of justice.*

It was contended that trial Chief Magistrate had relied on the Sections 34 and 40 of the Landlord Tenancy Act of 2022 to conclude that "…parties intended that renewal of the agreement or termination be considered after 5 years…" Counsel submitted that the tenancy agreement was entered into 1/05/2018 and the law that guided its drafting was the Rent Restrictions Act Cap 231 and the Landlord Tenant Act of 2022 came to be applicable four years after the agreement had been signed. Counsel argued that the law cannot act retrospectively and therefore it was an injustice to apply a law of 2022 to define the relationship between the landlord and tenant that started in 2018.

Counsel submitted that the decision of the trial Chief Magistrate should be set aside for failure to consider a relevant statute while deciding the case citing *Huddersfield Police Authority v Watson [1947] 2 AII ER 193***.**

Counsel for the Respondents on the other hand argued that the Landlord and Tenant Act had been assented to on the 12th April 2022 when the tenancy agreement was still in force. Counsel argued that the same had become a norm for all tenancies from its date of assent and as such the Appellant could not hide from its directions.

Counsel submitted that it was trite law that all agreements were made subject to the existing laws or statutes and that they should not be seen to change law as it is. It therefore follows that the learned trial Chief Magistrate rightly followed the provisions of the Landlord Tenant Act 2022 which was the current governing tenancies in Uganda. Counsel argued that the learned Trial Chief Magistrate rightly relied on sections 35-40 of the Landlord and Tenant Act for guidance.

#### *Analysis*

I respectfully disagree with the appellant's counsel. The Landlord and Tenant Act, 2022 came into force during the pendency of the Tenancy Agreement as the regulating law of all tenancy relationships in Uganda repealing the Rent Restrictions Act Cap 231. It would therefore be preposterous for the learned trial Chief Magistrate to rely on repealed law. The issues of renewal of the tenancy had to automatically be done under the new law since it had repealed the old law. The court had to be alive to the current law and the extent of its applicability to the new circumstances.

The citation of the new law did not in any way form the basis of the decision made by court. The court determined the case on the facts before the court, which was premised on the tenancy agreement between the parties. The tenancy was for a fixed term of five years and the same expired upon effluxion of time.

The learned trial Chief Magistrate sought guidance and cited the current law on Landlord and Tenant which sets out the different ways of termination of tenancy. And she noted further *"It is clear in the wording of the agreement that the parties intended that renewal of the agreement or termination be considered after 5 years and any party intending to terminate had to issue notice of 12 months to the other party".*

She ably noted that the *'issue before court is not one of termination but rather lapse of a tenancy agreement'.* The Landlord and Tenant Act was never applied in the determination of the case before the court as counsel would wish this court to believe. The appellant was only trying to make *'a mountain out of a* *mould'* and does not even show any injustice suffered or any miscarriage of justice in this matter by the citation of this new law.

#### **Ground 2:**

# *The learned Trial Magistrate erred in law and fact when she failed to properly evaluate evidence thereby reaching a wrong conclusion that the Applicants are not in breach of the tenancy agreement.*

This ground of appeal offends the rules of this court for formulation of grounds of appeal. A ground of appeal is the allegation of error of law or fact made by an appellant as the defect in the judgment/ ruling appealed against and upon which it is relied upon to set it aside.

This ground of appeal is vague and it is thus incompetent. Vagueness of a ground of appeal may arise where it is couched in a manner which does not provide any explicit standard for its being understood, or when what is stated is so uncertain that it is not susceptible of being understood. It may also be considered vague when the complaint is not defined in relation to the subject or it is not particularized, or the particulars are clearly irrelevant.

It is not sufficient for an appellant to allege that the trial court did not evaluate properly the evidence before it. The appellant must go further by pointing out the error he complains about and, in addition, he has to convince the appellate court that if the corrections of the error are made, the decision of the court will not stand.

With all due respect to counsel, this ground of appeal is redundant and is properly embedded in the other grounds of appeal and there was no basis of making it stand alone and the court shall not delve into it.

With the foregoing, I find no merit in this appeal and it is hereby dismissed with costs. The appellant was buying more time in litigation to continue occupying the land to the detriment of the estate. This is unfair and it was bordering on being an abuse of court process.

I so order

*SSEKAANA MUSA JUDGE 25th October 2024*