Kampala Capital City Authority v Fuelex Uganda Limited (Miscellaneous Cause 62 of 2023) [2024] UGCommC 135 (12 April 2024)

### 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) MISC. CAUSE NO. 62 OF 2023**

# 10 **KAMPALA CAPITAL CITY AUTHORITY ::::::::::::::::::::::::::::: APPLICANT VERSUS**

**FUELEX UGANDA LIMITED :::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

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

#### Introduction

This application was brought by way of Notice of Motion under **Section 29 of the Local Governments (Rating) Act, 2005, Section 98 of the Civil Procedure Act, Cap. 71, Rules 3, 4 and 5 of the Local Governments** 20 **(Rating) Regulations S. I No. 38 of 2006** and **Order 52 Rules 1 and 3 of**

- **the Civil Procedure Rules S. I No. 71-1** seeking orders that: - 1. The Applicant be granted a summary warrant to recover UGX 93,502,237/= (Uganda Shillings Ninety Three Million Five Hundred Two Thousand Two Hundred Thirty-Seven Only) due to it in property 25 rates from the Respondent in respect of its commercial properties. - 2. Costs of this application be provided for.

#### Background

The background of this application is contained in the affidavit of Mr. 30 Norbert Seruwagi, the Applicant's Manager Compliance and Inspectorate, and is summarized below:

5 1. That the Applicant is a statutory body corporate charged with the mandate of administering Kampala Capital City on behalf of the Central Government and with the legal obligation to value, levy and collect property rates from all owners and/or tenants of commercial and residential rented properties within its jurisdiction.

- 2. That in fulfillment of its legal obligations, in or around 2017, the Applicant commenced the valuation of all properties including the Respondent's commercial properties described as P117008027, P117008028 and P117008029 located in its Central Division for 15 purposes of getting the rate payable. - 3. That in or around 2019, the Applicant commenced the valuation of all properties including the Respondent's commercial properties 20 described as P319008144, P319008145, P319008146, P319038361, P319038362, P319038363 and P319038364 located in its Kawempe Division for purposes of getting the rate payable. - 4. That further, in or around 2019, the Applicant commenced the 25 valuation of all properties including the Respondent's commercial properties described as P419018999 and P419019000 located in its Makindye Division for purposes of getting the rate payable. - 30 5. That upon completion of the Valuation for the Central, Kawempe, and Makindye Divisions, gazette notices were duly published notifying the public of the coming into force of the valuation lists and rates. - 35 6. That the Respondent's properties were valued as follows:

- 5 a) P117008027 with a ratable value of UGX 3,510,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 210,600/= for the years 2017-2018 to 2020-2021 and the rate of 4% rate hence yielding an annual rate of UGX 140,000/= for the years 2021-2022 and 2022- 10 2023 payable by the Respondent per annum. - b) P117008028 with a ratable value of UGX 14,040,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 842,400/= payable by the Respondent per 15 annum. - c) P117008029 with a ratable value of UGX 1,404,000/= was subjected to the approved rate of 6% rate hence yielding an 20 annual rate of UGX 84,240/= for the years 2017-2018 to 2020- 2021 and the rate of 4% rate hence yielding an annual rate of UGX 56,160/= for the years 2021-2022 and 2022-2023 payable by the Respondent per annum. - 25 d) P319008144 with a ratable value of UGX 6,059,595.78/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 363,575.75/= payable by the Respondent per annum. - e) P319008145 with a ratable value of UGX 29,224,875.96/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 1,753,492.56/= payable by the Respondent per annum.

- 5 f) P319008146 with a ratable value of UGX 106,369,200/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 6,382,152/= payable by the Respondent per annum. - g) P319038361 with a ratable value of UGX 4,319,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 259,140/= for the years 2019-2020 to 2020-2021 and the rate of 4% rate hence yielding an annual 15 rate of UGX 172,760/= for the years 2021- 2022 and 2022- 2023 payable by the Respondent per annum. - h) P319038362 with a ratable value of UGX 2,460,000/= was subjected to the approved rate of 6% rate hence yielding an 20 annual rate of UGX 147,600/= for the years 2019-2020 to 2020-2021 and the rate of 4% rate hence yielding an annual rate of UGX 98,400/= for the years 2021- 2022 and 2022-2023 payable by the Respondent per annum. - i) P319038363 with a ratable value of UGX 80,640,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 4,838,400/= payable by the Respondent per annum. - j) P319038364 with a ratable value of UGX 5,275,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 316,500/= payable by the Respondent per annum.

- 5 k) P419018999 with a ratable value of UGX 59,136,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 3,548,160/= payable by the Respondent per annum. - 10 l) P419019000 with a ratable value of UGX 2,520,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 151,200/= for the years 2019-2020 to 2020-2021 and the rate of 4% rate hence yielding an annual rate of UGX 100,800/= for the years 2021-2022 and 2022- 15 2023 payable by the Respondent per annum. - 7. That despite the Respondent being aware of the outstanding balance, it has either ignored, failed, and/or refused to pay the debt of UGX 93,502,237/= now outstanding. - 20 8. That the Respondent was served with a demand notice cum notice of intention to sue for property rates arrears amounting to UGX 93,502,237/=. - 25 9. That the intervention of this Honorable Court is necessary to prevent irreversible loss being occasioned to the Applicant.

#### Representation

The Applicant was represented by Counsel Ahabwe Jones of the Directorate of Legal Affairs, Kampala Capital City Authority.

30 Counsel for the Applicant informed the Court that attempts to physically serve the Respondent's Managing Director or Manager were not successful and that service of the application and hearing notice was subsequently made through the registered post office address of the Respondent. Counsel for the Applicant further informed Court that a copy of the hearing

5 notice and the notice of motion were left with the Respondent's receptionist.

Furthermore, an order to serve the Respondent by way of substituted service via an English Newspaper of wide circulation was made by the Court and as per the affidavit of service deponed on 25th January, 2024 by

10 Mr. Bagarukayo Raymond, an authorized Court process server, the hearing notice was published on 5th January, 2024 in the New Vision Newspaper at page 11.

In addition, according to the aforementioned affidavit of service, a copy of the hearing notice and notice of motion were also served vide the registered

15 postal address of the Respondent on 12th January, 2024 and that on the same day, Mr. Bagarukayo Raymond emailed a copy of the hearing notice and the notice of motion to the known email address of the Managing Director of the Respondent.

When the matter came up for hearing on 30th January, 2024, the 20 Respondent did not enter presence nor did it file its affidavit in reply, and to this, the Applicant was granted an order to proceed ex parte.

In the case of *Serefaco Consultants Ltd Vs Euro Consult BV and Another Civil Application No. 16 of 2007,* the Court of Appeal stated that it is settled law that if the Applicant supports his application by 25 affidavit or other evidence and the Respondent does not reply by affidavit or otherwise, and the supporting evidence is credible in itself, the facts stand as unchallenged.

The above has been echoed in High Court decisions such as the case of *William Akankwasa Vs Registrar of Titles HCMA No.33 of 2008*, 30 wherein **Hon. Lady Justice Percy Night Tuhaise** (as she then was) with

5 the guidance of the case of *Samwiri Masa Vs Rose Achieng [1978] HCB 297*, held that facts as adduced in the affidavit evidence of the Applicant that are neither denied nor rebutted are presumed to be admitted.

Considering the fact that the Respondent did not file its affidavit in reply 10 despite being served, I therefore infer that the Respondent admitted to the facts in the affidavit in support of the application hence, the application stands unopposed.

However, given the nature of this application and the burden of proof in civil matters, (See: **Sections 101, 102, and 103 of the Evidence Act,**

15 **Cap. 6**), the Applicant is required to show that the person sought to be proceeded against is the person liable to pay the amount due and that he or she was duly served with a demand notice.

Issues for Determination

In accordance with **Order 15 Rule 3 of the Civil Procedure Rules,** this 20 Court framed the issues to read as follows:

- 1. Whether the Applicant should be granted a summary warrant to recover UGX 93,502,237/= from the Respondent? - 2. What remedies are available to the parties?

Analysis and Determination

25 Issue No.1: Whether the Applicant should be granted a summary warrant to recover UGX 93,502,237/= from the Respondent?

As stipulated in **Sections 29, 30 and 31 of the Local Governments (Rating) Act**, Local Governments have various options for recovery of outstanding property rates and these include recovery by summary 30 warrant, recovery by action and recovery from tenants and occupiers - 5 among others. In the case of *Kampala Capital City Authority Vs Aya Investments (U) Ltd t/a Pearl of Africa HCMA No. 10 of 2019,* **Hon. Lady Justice Anna B. Mugenyi** granted a summary warrant for recovery of unpaid property rates under **Section 29 of the Local Governments (Rating) Act**. - 10 According to **Section 29 (4) of the Local Governments (Rating) Act,** before a summary warrant is granted, the Court has to be satisfied that: - a) The person sought to be proceeded against is liable to pay the amount. - b) The amount is due from him or her. - 15 c) He or she has been duly served with a demand notice and two months have lapsed without the Respondent paying off the property rates due.

In the instant matter, Counsel for the Applicant submitted that in or around 2017 and 2019, the Applicant commenced the valuation of all the

- 20 properties located in the Central, Kawempe and Makindye Divisions in fulfillment of its legal obligations to value, levy and collect property rates from all owners and tenants of commercial and residential rented properties within its jurisdiction as a body corporate on behalf of the Central Government. - 25 Counsel for the Applicant further submitted that some of the properties that were valued belonged to the Respondents and that these properties are described as; P117008027, P117008028, P117008029, P319008144, P319008145, P319008146, P319038361, P319038362, P319038363, P319038364, P419018999 and P419019000 and that the outstanding 30 property rates amount to UGX 93,502,237/=.

- 5 Under paragraph 9 of the affidavit in support of the application, Mr. Norbert Seruwagi specified the valuation of the Respondent's properties as follows: - a) P117008027 with a ratable value of UGX 3,510,000/= was subjected to the approved rate of 6% rate hence yielding an annual 10 rate of UGX 210,600/= for the years 2017-2018 to 2020-2021 and the rate of 4% rate hence yielding an annual rate of UGX 140,000/= for the years 2021-2022 and 2022-2023 payable by the Respondent per annum. - 15 b) P117008028 with a ratable value of UGX 14,040,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 842,400/= payable by the Respondent per annum. - 20 c) P117008029 with a ratable value of UGX 1,404,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 84,240/= for the years 2017-2018 to 2020-2021 and the rate of 4% rate hence yielding an annual rate of UGX 56,160/= for the years 2021-2022 and 2022-2023 payable by the Respondent 25 per annum. - d) P319008144 with a ratable value of UGX 6,059,595.78/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 363,575.75/= payable by the Respondent per annum. - e) P319008145 with a ratable value of UGX 29,224,875.96/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 1,753,492.56/= payable by the Respondent per annum.

- 5 f) P319008146 with a ratable value of UGX 106,369,200/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 6,382,152/= payable by the Respondent per annum. - 10 g) P319038361 with a ratable value of UGX 4,319,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 259,140 for the years 2019-2020 to 2020-2021 and the rate of 4% rate hence yielding an annual rate of UGX 172,760/= for the years 2021- 2022 and 2022-2023 payable by the Respondent 15 per annum. - h) P319038362 with a ratable value of UGX 2,460,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 147,600/= for the years 2019-2020 to 2020-2021 and 20 the rate of 4% rate hence yielding an annual rate of UGX 98,400/= for the years 2021- 2022 and 2022-2023 payable by the Respondent per annum. - 25 i) P319038363 with a ratable value of UGX 80,640,000/= was subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 4,838,400/= payable by the Respondent per annum. - j) P319038364 with a ratable value of UGX 5,275,000/= was 30 subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 316,500/= payable by the Respondent per annum. - k) P419018999 with a ratable value of UGX 59,136,000/= was 35 subjected to the approved rate of 6% rate hence yielding an annual rate of UGX 3,548,160/= payable by the Respondent per annum. - 10 l) P419019000 with a ratable value of UGX 2,520,000/= was subjected to the approved rate of 6% rate hence yielding an annual

rate of UGX 151,200/= for the years 2019-2020 to 2020-2021 and $\mathsf{S}$ the rate of 4% rate hence yielding an annual rate of UGX $100,800/$ = for the years 2021-2022 and 2022-2023 payable by the Respondent per annum.

The Applicant attached **annexures "D", "E", "F", "G", "H", "I", "J", "K",** "L", "M", "N" and "O". The annexures are copies of statements of account $10$ that show the amounts due for each of the Respondent's properties specified above. A close analysis of the said statements of account shows that they belong to Fuelex Uganda Limited, the Respondent herein. Since the Respondent did not file an affidavit in reply, the same statements of account stand unchallenged and thus are admitted as true. The above 15 fulfills requirements a) and b) derived from **Section 29 (4) of the Local** Governments (Rating) Act.

The last requirement that has to be satisfied is to the effect that the Respondent must have been duly served with a demand notice and two $20$ months have lapsed without the Respondent paying the property rates due. Under paragraphs 10 and 12 of the affidavit in support, the deponent stated that the Applicant's Directorate of Revenue Collection issued a mandatory statutory demand which was forwarded to the Applicant's lawyers for action and that as a result, the Deputy Director Litigation Services issued a demand cum notice of intention to sue for property rates $25$ arrears amounting to UGX $93,502,237$ which was served on the Respondent.

To prove the above assertions, the Applicant adduced **annexure "S"**, which is a demand cum notice of intention to sue for property rates arrears amounting to UGX 93,502,237.35/ $=$ issued by the Acting Director Legal Affairs Mr. Caleb Mugisha on 10<sup>th</sup> January, 2023 to the Managing Director phine

5 of Fuelex Uganda Limited. This notice was received by Mr. Waiswa Ivan at Makindye Fuelex Station on 25th January, 2023 who duly acknowledged the service by signing on the same.

Given the fact that there is no evidence to contradict the above, I hereby find that the Respondent was duly served as is required by **Section 29 (4)**

10 **of the Local Governments (Rating) Act.**

Further **Section 29 (3) of the Local Governments (Rating) Act** requires that the demand notice in issue should have been served and thereafter two (2) months lapse without the Respondent effecting payment of the property rates due.

15 In the instant case, the demand notice was served on the Respondent on 25th January, 2023. The Applicant filed this application on 30th June, 2023 which is five (5) months after service of the demand notice. According to paragraph 13 of the affidavit in support of the application, the Respondent has not made any payments towards settlement of the debt ever since the 20 service of the demand notice was made.

In the premises, given the fact that the Respondent is the person sought to be proceeded against who is liable to pay UGX 93,502,237/= as the amount due from it as property rates arrears and it was duly served with a demand notice, this Court finds that the Applicant is entitled to a 25 summary warrant to recover the property rates arrears from the Respondent.

Issue No. 1 is resolved in the affirmative.

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

Having resolved issue 1 in the affirmative, the Applicant is entitled to a summary warrant to recover UGX 93,502,237/= from the Respondent as property rates arrears. Accordingly, the application is granted with the following orders:

- 10 1. The Applicant is hereby granted a summary warrant to recover UGX 93,502,237/= (Uganda Shillings Ninety Three Million Five Hundred Two Thousand Two Hundred Thirty Seven Only) due to it in property rates from the Respondent in respect of its commercial properties described as; P117008027, P117008028, P117008029 located in the 15 Central Division, P319008144, P319008145, P319008146, P319038361, P319038362, P319038363, P319038364 located in the Kawempe Division, P419018999 and P419019000 located in the Makindye Division. - 20 2. Costs of the application are awarded to the Applicant.

I so order.

Dated, signed and delivered this **12th** day of **April**, **2024.**

Patience T. E. Rubagumya 25 **JUDGE** 12/04/2024

## 5 **Ruling read in Chambers**

12th April, 2024

8:30am

In attendance: Ms. Mary Wokape, Court Clerk. Mr. Ahabwe Jones, Counsel for the Applicant. Parties are absent. Counsel for the Respondent is absent.

Patience T. E. Rubagumya

**JUDGE**

12/04/2024