Gapco v Kabarole (HC CV MA NO. 75 OF 2011) [2012] UGHC 433 (27 April 2012)

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT FORT PORTAL

HC CV MA NO. 0075 OF 2011

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APPLICANT

VERSUS

KABAROLE RESPONDENT

BEFORE HON. MR. JUSTICE MIKE J. CHIBITA

RULING

- This is an application for the Judicial Review Orders of Certiorari, prohibition and Mandamus by the applicants against the respondents. - The application is in respect of Plot 18 Lugard Road, Fort Portal town where the applicant operates a petroleum station. The respondent leased the land to the applicant for a period expiring 1st January, 2012.

The applicant applied for a renewal of the lease on 30th November, 2010 and sent a reminder on 11th February, 2011. Apparently the respondent decided not to extend the lease but instead allocated the suit property to a one S. S Mugasa.

The issues for determination as agreed by the two parties are:-

- ¹ Whether the decision to refuse to extend the lease and offering it to S. S Mugasa instead was illegal. - 4 55 2 Whether the Judicial Review Orders of Certiorari, Prohibition and Mandamus should issue against the respondent's decision.

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3. What are the remedies available?


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To r e the first issue we need to deal with several small issues that comprise the big issue. For example:-

- Was the lease renewal automatic or conditional? - If conditional what were the conditions? - Did the applicant know about these conditions and their breach? - Did the applicant receive notices of any breach that he needed to rectify? - At what point in this whole process did the respondent entertain the application from S. S Mugasa? - Was the respondent within his right to grant a lease to S. S Mugasa and deny the applicant?

Counsel for the applicant contended that the Lease Agreement of 4th June, 2002 has a clause for automatic renewal for 49 years with effect from 2nd January, 1980.

•7 Counsel for the respondent on the other hand contended that the last lease extension in favour of the applicants expired on 31st January, 2011. Further that any renewal was subject to compliance with the building and other covenants under the lease.

He therefore concluded that by the time the decision not to renew was taken the applicants' lease had already expired. Furthermore, by that time they had breached major covenants in the lease Agreement relating to building and standards of cleanliness.

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Annexture Btothpo ^t for automatic r aPPllcant's Notice of Motion sets the condition

n the lessee/s shall have complied with the building enant herein and if there shall not be any existing breach or non observance...of any of the covenants whether express or implied."

The lease renewal was therefore conditional upon the lessee's complying with certain covenants.

The applicants in the affidavit of Bikram Shergill paragraph 8 thereof contended that they had embarked on extensive rehabilitation of the suit property worth Shs 70,000,000/=.

The respondents on the other hand attached letters dated 16th December, 2010, 17th February, 2011 and 2nd May, 2011 indicating that the station was in a state of disrepair and warning of Linspecified consequences.

Therespondents, however through the affidavit of Peter Alinda in reply do not respond to the contention by Bikram Shergill that the applicants had embarked on extensive rehabilitation. Neither do they dispute the genuineness of the attachments in support of that contention.

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■7 Furthermore, the letters attached by the respondents do not specifically spell out that the lease agreement had been breached and therefore they were exercising their rights under the agreement to terminate or decline to renew the application.

^I find the letters very vague and of little help to the respondents as evidence of bringing serious breaches of covenant to the attention of the applicants. Ml H?GH C0lJRT F0RT postal

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Moreover, at the time of writing the last two letters of 17^th February, 2011 and $2^{nd}$ May, 2011 the suit property had already been applied for by the said S. S Mugasa on 4^th January, 2011.

The application was recommended for approval by the area Land Committee on 19^th January, 2011 and finally approved, signed and sealed by the Secretary, District Land Board on 14^th March, 2011.

A lease agreement was executed with effect from 1^st May, 2011 to $\mathbf{Q}^{\text{max}}$ run for 49 years as per attachments to the applicants' affidavit. By the time of the last letter to the applicants on 2^nd May, 2011 giving 14 days' notice to closure of the station, a lease agreement had already been signed with a new lessee but this information had not been brought to the attention of the applicants.

Additionally, the applicants have shown that they applied for renewal of the lease on 30^th November, 2010 and sent a reminder on 11^th February, 2011. There is no evidence that the applicants were honoured with a response at all.

This would have been the perfect opportunity to let the applicants know that the lease would not be renewed for violating diverse conditions of the lease. For some inexplicable reason this was not done.

This chronology of events shows that even if the respondents were entitled not to renew the lease they went about the whole process in a very unprofessional manner that smirks of bad faith.

They did not bring to the attention of the applicants the nature of breach and the consequences that accrue from such breach. They did not respond to their two letters applying for renewal of the lease. They did not give the applicants a fair hearing.

They did not act in accordance with the law, vide section 59 (1) of the Land Act. They therefore acted illegally to entertain the application from S. S Mugasa while quietly declining to renew the

HIGH COURT FORT POSTAL THIS IS A TRUE COPY OF THE ORIGINAL RECORD DATE PROPRESSED OF REPORT RAR


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applicant's lease when he was still in occupation and therefore had apparent ownership.

Learned Counsel for the respondents relied heavily on the case of Erukana Kawe vs Vader Civil Appeal No. 2/2002, which was distinguished by learned Counsel for the applicants. I am persuaded by the distinction that in that case rent had not been paid and premises had been sublet unlike the instant case.

I would therefore answer the first issue in the affirmative and in favour of the applicants.

On whether the judicial review orders of certiorari, prohibition and mandamus should issue as per issue number 2, I am persuaded by the principle in the decision of my brother Justice Remmy Kasule in Sadrudin Punjwani vs Kampala District Land Board and another Civil Suit No. 07 of 2005.

The requirement for those orders to kick in is that the administrative action should have been illegal, irrational and procedurally improper.

It has already been found under issue number one that the actions of the respondent to lease out the suit property to S. S Mugasa while it was still under the ownership was contrary to section 59 (1) (a) and therefore illegal.

The decision of the respondents not to respond to the applications $\overline{\alpha}$ for renewal and instead to go ahead and lease it out while continuing to write to the applicant was diversionary, irrational and procedurally improper.

With due respect to the authorities of Re Mustafa, Attorney General vs Tinyefuza and Muhwezi vs Attorney General cited by Counsel for the respondent, I find them inapplicable to the instant case.

WA HIGH COUPT FOUT MOSTAL ... A TRUE Addition and The JANHAR ARCORD and fit at the 1 of DATE:

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HIGH COURT FORT PORTAL ERTIFY THAT THIS IS A TRUE COPY OF THE ORIGINAL RECORD DATE: .......................... REGISTRAR

I therefore find that this is a proper case for the orders of certiorari, $\frac{1}{2}$ prohibition and mandamus to issue.

The following remedies are therefore availed to the respondents:-

- 1. The order of certiorari is issued to quash the decision of the respondents whereby they refused/failed/neglected to extend the lease of the applicant in respect of Plot 18 Lugard road, Fort Portal. - 2. An order of prohibition is issued to prohibit the respondents from implementing the decision made to lease out the suit property, Plot 18 Lugard Road, Fort Portal to S. S Mugasa and another. - 3. The order of mandamus is issued directing the respondent to renew the applicant's lease on Plot 18 Lugard Road, Fort Portal for a further term as provided for in the lease agreement signed between the parties. - 4. The respondent will meet the costs of this suit and the preceding applications in this matter. - 5. The certificate for two Counsel is denied because it was not justified.

Dated at Fort Portal this 27^th day of April, 2012

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JUSTICE MIKE J. CHIBITA

RULING READ AND DELIVERED IN THE PRESENCE OF:

| | BIGH CONSTRUCT PORTAL | |--|----------------------------------------------------------------| | | <b>STORATEVITA TELEVITATEURA</b><br>COPY OF THE CALLSAL RECORD | | | <b>HARRY RESTRAR 1</b> | | | |

| | EXNI COURT FORT PORTAL | |-----------------------------------------------------------|------------------------| | EXTING THAT THIS IS A TRUE<br>COPY OF THE ORIGINAL RECORD | | | DATE: ***** REGISTRAK | | | | |

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1. ENOS TUMUSIIME FOR THE APPLICANT

2. JAMES AHABWE FOR RESPONDENT

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3. PARTIES: ALINDA PETER FOR RESPONDENT

4. HERBERT MWESIGWA; COURT CLERK/INTERPRETER

BY: $\beta$ 占 $27/04$ $2012$ MIKE J. CHIBITA JUDGE HIGH COURT FORT PORTAL

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CERTIFY THAT THIS IS A TRUE THE ORIGINAL RECORD DATE: ..... ..... REGISTRAR

*LIGHT FORT PORTAL* TRYING THAT THIS IS A TRUE YOF THE ORIGINAL RECORD

SECTION SECONDO PREGISTRAR