Lachen Investiment Limited and Others v The Onwers Of Condominium Plan No. 0031 and 3 Others (Miscellaneous Application 473 of 2025) [2025] UGHCLD 52 (3 April 2025)

Full Case Text

## THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [LAND DIVISION] MISCELLANEOUS APPLICATION NO. HCT-00-LD-MA-0473-2025 (ARISING FROM CIVIL SUIT NO. 886 OF 2020)

- 1. LACHEN INVESTMENTS LTD - 2. LAMECH KIIZA RUBAALE - 3. KATENDE HILLARY GERE:::::::::::::::::::::::::::::::::::

## **VERSUS**

- 1. THE OWNERS OF CONDOMINIUM PLAN NO. 0031 - 2. CHWEZI PROPERTIES LTD - 3. THOMAS MUHIKA - 4. DICKENS ASIIMWE KATTA::::::::::::::::::::::::::::::::::

## **BEFORE: HON. JUSTICE BERNARD NAMANYA**

## **RULING**

- 1. This application was brought under *Section 98 of the Civil Procedure Act (Cap.* 282), Section 37 of the Judicature Act (Cap. 16), rules 42 and 76 of the Judicature (Court of Appeal Rules) Directions and Order 43 rule 4, and Order 52 rules 1 & 2 Civil Procedure Rules for orders: i) That an order of stay of execution issues against the respondents, their agents and servants and persons claiming under them staying the execution and implementation of the decree and all orders of this court in High Court Civil Suit No. 886 of 2020: The Owners of Condominium Plan No. 0031 & 3 Others v. Lachen Investments Ltd & 2 Others until the final determination of the applicants' intended appeal in the Court of Appeal; and ii) That the costs of this application be provided for. - 2. The application is supported by the affidavit of Lamech Kiiza Rubaale. The respondents opposed the application and filed an affidavit in reply through Ebert

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Les renforming

Byenkya. The 2nd applicant filed an affidavit in rejoinder. On the 6 March 2025, the court issued directions to the parties to file written submissions which I have considered.

- 3. The main issue for determination is whether the applicants have sufficiently proved the conditions for grant of an order of stay of execution. - 4. Order 43 rules 4 (1), (2) & (3) of The Civil Procedure Rules provides that: "(1) $[...]$ the High Court may for sufficient cause order stay of execution of the decree.

(2) $[...]$ the court which passed the decree may on sufficient cause being shown order the execution to be stayed.

(3) No order for stay of execution shall be made under subrule (1) or $(2)$ of this rule unless the court making it is satisfied—

(a) that substantial loss may result to the party applying for stay of execution unless the order is made:

(b) that the application has been made without unreasonable delay: and

(c) that security has been given by the applicant for the due performance of the decree or order as may ultimately be binding upon him or her."

5. The purpose of an order for stay of execution pending appeal is to preserve the subject matter so that the appeal is not rendered nugatory. In the case of Gashumba Maniraguha v. Sam Nkudiye, Supreme Court Civil Application No.24 of 2015 (coram: Tumwesigye; Kisaakye; Arach-Amoko., JJ. S. C; Odoki;

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Bernemlemeny

Tsekooko., Ag. J. J. S. C), the court held that there are four grounds on which an application for stay of execution may be proved:

- i) that there must be a pending appeal which prima facie, has a likelihood of success: - ii) that the appeal will be rendered nugatory if a stay of execution is not granted; - iii) that if conditions 1 and 2 above have not been established, court must consider where the balance of convenience lies; and - iv) that the applicant must establish that the application was instituted without delay. - 6. The applicants have proved that there is a pending appeal. A notice of appeal was lodged in the court on the 25 February 2025. The applicants have also attached a draft memorandum of appeal to the application. I am therefore satisfied that there is a pending appeal. - 7. I will focus my attention on the second and third conditions that must be satisfied by the applicants: Will the appeal be rendered nugatory if a stay of execution is not granted? Where does the balance of convenience lie? - 8. The dispute in *High Court Civil Suit No. 886 of 2020* concerned common property, which is defined under the *Condominium Property Act (Cap. 234)* as that part of the condominium property which does not belong to any specific apartment unit owner, and which is used in common by the various owners of the apartment units. The plaintiffs in the said suit, were aggrieved that whereas the 1st defendant (Lachen Investments Ltd) had represented to them prior to purchase, that the apartment units are serviced with a parking area and swimming

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Demanfamenya

pool; after the purchase, the defendants asserted that the land occupied by the parking area and swimming was not part of the condominium property and was never intended to be used as such. The 3rd applicant (Katende Hillary Gere), who is a nephew to the 2nd applicant (Lamech Kiiza Rubaale), claimed separate ownership of the land on which the parking area was located. The 2nd applicant (Lamech Kiiza Rubaale) also claimed ownership of the land on which the swimming pool was located in his personal capacity. The apartment unit owners, who are respondents in the instant application, and were plaintiffs in the main suit, were denied access to both the parking area and swimming pool area. As a matter of fact, the respondents (The Owners of Condominium Plan No. 0031 & Others) were forced to rent an adjoining parcel of land which currently serves as a parking area for the apartment units. The court, after considering the evidence before it and the law, issued the following declarations and orders:

- a) That the parking area designated on Condominium Plan No. 0031 registered on the 6 September 2005 measuring approximately 0.232 acres is common property and shall be held by the owners of the individual apartment units as tenants in common in accordance with the provisions of section 6(2) of the Condominium Property Act (Cap. 234). - b) That the swimming pool, designated as a playground on Condominium Plan No. 0031 registered on the 6 September 2005 measuring approximately 0.044 acres is common property and shall be held by the individual owners of the apartment units as tenants in common in accordance with the provisions of section 6(2) of the Condominium Property Act (Cap. 234). - c) That a permanent injunction does issue restraining the defendants and their agents from alienating, selling and/or interfering with the parking and swimming pool areas.

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Bernenlamonya

- d) That the defendants' operation of a hotel, bar and restaurant on Condominium Plan No. 0031 is illegal and should cease forthwith. - e) That the $1^{st}$ and $2^{nd}$ defendants shall demolish and remove the buildings housing the outdoor bar and restaurant on Condominium Plan No. 0031 within 14 (fourteen) days from the date of the Judgment and surrender this area of the land to the plaintiffs and other individual owners of apartment units for utilisation as common property including its potential use as a parking area in accordance with Condominium Plan No. 0031. - f) That if the defendants fail to demolish and remove the outdoor bar and restaurant as herein ordered; they shall be evicted and the buildings or structures on the land comprising of the bar and restaurant, demolished in accordance with *The Constitution (Land Evictions) (Practice) Directions*. 2021. - g) That Ushs 52,000,000 (Uganda Shillings Fifty-Two Million) is awarded to the 1st plaintiff (The Owners of Condominium Plan No. 0031) being general damages for denial of the use of parking areas. - h) That a sum of USD 197,145 (United States Dollars One Hundred and Ninety-Seven Thousand One Hundred and Forty-Five) is awarded to the 1st plaintiff being the cost of re-constructing a boundary wall, gate house, car parking, compound lighting and swimming pool. - i) That Ushs 250,000,000 (Uganda Shillings Two Hundred and Fifty Million) is awarded to the $2nd$ plaintiff (Cwezi Properties Ltd) being general damages. - j) That Ushs 100,000,000 (Uganda Shillings One Hundred Million) is awarded to the 3rd plaintiff (Thomson Muhika) being general damages. - k) That Ushs 80,000,000 (Uganda Shillings Eighty Million) is awarded to the 4th plaintiff (Dickens Asiimwe Katta) being general damages.

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Barrentomenya

- 1) That the defendants shall pay interest of 15% per annum on the sums awarded to the plaintiffs from the date of judgment until payment in full. - m) That the costs of the suit are awarded to the plaintiffs and shall be paid by the defendants jointly and/or severally. - 9. The applicants, who have appealed to the Court of Appeal against the judgment of this court, want an order staying execution of the judgment of this court. The applicants have a duty to satisfy me that the appeal will be rendered nugatory if a stay of execution is not granted. - 10. Firstly, the judgment of this court was to the effect that the parking area and the swimming pool area was common property collectively owned by the individual owners of apartment units as tenants in common. According to law, the suit property is under the control of the 1st respondent (The Owners of Condominium Plan No. 0031). The 1st respondent is a body corporate established under *section 19 of the Condominium Property Act (Cap. 234)* which provides *inter alia* that:

"There shall, upon the registration of a condominium plan, be constituted in respect of any building or structure to which the plan relates, a corporation... A corporation shall consist of persons who own units in the parcel to which the condominium plan relates."

11. The evidence before the court proves that the 1st applicant (Lachen Investments Ltd) owns eight $(8)$ apartment units in the condominium property. By virtue of section 19 of the Condominium Property Act (Cap. 234), the 1st applicant (Lachen Investments Ltd) is a member of the 1st respondent (The Owners of Condominium Plan No. 0031). Section 6 (2) of the Condominium Property Act (*Cap. 234*) provides that: $\frac{1}{2}$

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"The common property comprised in a registered condominium plan shall be held by the owners of all the units as tenants in common in shares proportional to the unit factors for their respective units."

12. Under the law, any disposal of the suit property (parking areas and swimming pool area) requires the consent and approval of the 1st respondent (The Owners of Condominium Plan No. 0031) in which the 1st applicant (Lachen Investments Ltd) is a member by operation of the law as explained above. The law requires the unanimous approval of all members of a condominium corporation (including the $1^{st}$ applicant – Lachen Investments Ltd) for any disposal of common property to be effected. *Section 21 (3) of the Condominium Property* Act (Cap. 234) provides that:

> " $A$ corporation may, by a unanimous resolution, transfer or lease the common property or any part of it, or grant an easement on the whole or part of the common property."

- 13. The 2nd applicant (Lamech Kiiza Rubaale) is a *director and shareholder* of the 1st applicant. The 3rd applicant (Katende Hillary Gere) is a *nephew* of the $2^{nd}$ applicant (Lamech Kiiza Rubaale). The $1^{st}$ , $2^{nd}$ and $3^{rd}$ applicants are closely *connected*; their purported interest in the suit property pending hearing of the appeal, can be secured through the 1st applicant (Lachen Investments Ltd) who is a member of the 1st respondent (The Owners of Condominium Plan No. 0031) by operation of the law. - 14. The net effect of all of this is that the suit property $-$ *vacant land* $-$ is not in danger of being wasted because the applicants are part of the decision making process of the corporation (1st respondent) that controls the suit property. In the event of the applicants' appeal being successful, the suit property will be intact.

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Berondormong

- 15. Secondly, the rest of the awards made in favour of the respondents are monetary in nature and the loss likely to be suffered by the applicants as a result of the execution of the judgment of this court is capable of monetary atonement if the applicants' appeal is successful. - 16. Generally, the applicants have failed to prove that they will suffer irreparable loss; in other words, that the loss that is likely to be suffered (if any) is not capable of monetary atonement. The loss ought to be of a nature that cannot be undone once it is suffered. - 17. This court has a duty to consider that the appeal will not be rendered nugatory while at the same time ensuring that the successful party is not deprived of the fruits of the judgment except for good and cogent reason. Due to the actions of the applicants, the respondents, since about the year 2020 were forced to rent an alternative parking area in the adjacent to the apartments at a cost of USD 1,500 per month. This was prompted by the actions of the respondents who converted the common user areas (including the parking area) into other uses contrary to Condominium Plan No. 0031. Were this court to grant an order staying execution of the judgment of this court, it would mean that the respondents (The Owners of Condominium Plan No. 0031 & Others) would continue incurring a monthly expense of USD 1,500 pending the hearing of applicants' appeal. In my opinion, this would be very unfair to the respondents, who have already endured so much hardship! - 18. In any event, the respondents own sixteen rental apartment units and earn rental income that is sufficient to compensate the applicants for any loss that may be incurred as a result of the execution of the judgment of this court. The respondents' ownership of sixteen rental apartment units in the condominium

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property was not contested by the applicants at the trial of the suit $-it$ 's a proven fact. At the trial of the suit, PW3 (Ebert Byenkya) testified that the 2nd respondent (Chwezi Properties Ltd) owns 8 apartment units. PW2 (Dickens Asiimwe Katta) testified that he owns 1 apartment unit. PW1 (Thomson Muhika) testified that he owns 7 apartment units. A total of sixteen rental apartments.

- 19. Overall, it is my finding that the balance of convenience is in favour of the respondents who are entitled to enjoy the fruits of the judgment. See the cases of Uganda Revenue Authority v. Mohammed Tumusiime, High Court Misc. Application No.440 of 2022 (per Justice Musa Ssekaana); and Junaco (T) Ltd & 2 Others v. DFCU Bank, High Court Misc. Application No.27 of 2023 (per *Justice Stephen Mubiru).* - 20. In conclusion, the applicants have failed to satisfy me that their appeal will be rendered nugatory if a stay of execution is not granted. Having regard to the evidence before me and the law, I order as follows: - a) That this application is dismissed. - b) That the applicants shall pay the costs of the application.

**IT IS SO ORDERED**

BERNARD NAMANYA **JUDGE** 3 April 2025

Delivered electronically via E-mail & ECCMIS

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