Mukisa Foods Limited v National Enterprises Corporation (Civil Suit 746 of 1992) [1996] UGHCLD 6 (29 May 1996)

Full Case Text

## THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

### CIVIL SUIT 746/1992

MUKISA FOODS LTD P-LATNTIFF

### VERSUS

### NATIONAL ENTERPRISES CORPORATION DEFENDANT

#### BEFORE THE HONOURABLE MR JUSTICE E. S. LUGAYT. ZI

#### JUDGEMENT

The Plaintiff in this case (which is a limited liability company) sued the Defendant (a Government parastatal) and in paragraph 8 of its amended plaint indicated that it was seeking the following remedies,

- " ( a) a declaration that the occupation of and refusal by the Defendant to yield up the p rope r ty comprised in FREEHOLD REGISTER VOLUME 8 FOLIOS 3,4 and 5 Plot Nos. 124 *,* 125 and 126 at K awe mp e to 11th upDecember*,* .19 9 2, w a s unlawful and unconstitutional. - ( b ) The removal of the machinery by the Defendant was unlawful and unconstitutional and the De fendant should be ordered to return the machinery removed to the plaintiff or in lieu thereof to Pay the value of the machines at a cost to be determined by an expert appointed by court. - ( c ) A d e c 1 a r a 11 o n t h a t the p 1 a i n t i 11 w a s n e v e r Al t any material time liable to ap p r op r i a t;i o n

expropriation in so far as the plaintiff i s a company incorporated in Uganda and never departed.

- (d) Mesne profits be paid to the plaintiff at the rate of Ugs. 5 November, 1992 . 5m/= per month wish effect from 1st - (e) Interest on (c) at the rate of 42% per annum from the date of judgment till full realization. - (f) Costs of the suit. - (g) Any other relief that this honourable court shall ID deem fit".

The remedy under (c) above*,* later abandoned by the plaintiff since it felt that the same longer relevant in view of the Supreme Court's decision in the case of Registered Trustees of. Kampala Institute vrs*.* Departed Asians P r o p e-r t y 15 Custodian Board Civil Appeal No. 21/93. was however, was no

From the court record, it would appear that despite the fact that the Defendant was served with court process in this case, it did not' bother to enter appearance, nor did it file any defence.

Accordingly, I a 1.1 owed the hearing to proceed e x - p a r t e . 20 its case against the Defendant, the Therefore in a bid to prove

plaintiff put up four witnesses, namely, Sadrudin Hashan Lakhani ( a share **holder** and director in the plaintiff PW1 ) , Yovan i Bwambale (a former financial officer of the plaintiff who also worked for the Defendant almost until the Defendant left the suit premises PW2 ) , No . 17700 Detective Corporal Tumwe **sigwe** J5 (PW3), and Margaret Nakato ( a former employee o f both the plaintiff and the Defendant who now works for called Britannia which is in Ntinda near Kampala i.e. PW4 ) . a company

In very brief terms, the plaintiff's case as can be gathered from the evidence of the above witnesses follows: was as

KThat the plaintiff which is an old company, finally --- obtained its present name under a certificate of Z1 Registration (Exh. "P4") which was issued to it by the Registrar of Business Names in 1968>S

The plaintiff was essentially a family business which IS manufactured biscuits and sweets under separate franchises o f **"wrights''s** and "Tremor Sharps" respectively.

Its place of business as shown under its certificate o f Title Folio 3,4,5 Plots (124-126) inclusive, Kawempe, on Kampala — Gulu Road. 20 (Exh." P 5 " ) was F. R. Vol 8,

The plaintiff carried on the said business at the above place until 1972 when the then President of the Uganda, (Idi Amin) expelled wholesale a 1.1 the Asians from this country.

**I**

Although the shareholders and directors of the plaintiff including PW1 inevitably had to go away from Uganda as a result of the above*,* they left the plaintiff which had a force of 350 workers and a number of big machines, fully operational.

next sixteen years o r so *i* after the departure of the shareholders and directors of the plainti f f, the plainti f f changed hands between several Gove rnment tenants or agencies which included Uganda Development Corporation and finally the Defendant. For the

It would appear that all those tenants or agencies maintained the original purpose for which the plaintiff was set up.

In that respect therefore, some of the original workers like **PW2** retained over the for baiting biscuits etc, were installed in 1980 for o f boosting production. '5 and PW4 were years and also more machines the purpose

The above aside, when the political atmosphere changed after the overthrow of Idi Amin, the plaintiff made efforts through **PW1** to repossess the suit premises at Kawempe. These efforts did not yield any good results until 1st April, 1992 , when PW1 was finally given a Repossession Certificate ( i . e . Exh. "P9" ) in 2o respect thereof.

On 7th April, 1992 , the old machinery for making biscuits and sweets in working order. **PW**1 visited the suit premises and found

5 On 9th April, 1992 , PW1 wrote a the Defendant ( i . e . Exh. "PIO 11 ) in which he referred, among other things , to his earlier letter in which he had enclosed the above Repossession letter to

Certificate and demanded vacant possession of the suit premises

5 in these words.

*I.*

"I would be grateful to know from you as to when we can have physical possession of our property to enable the reconstruction and rehabilitation of our company". us commence

By their letter dated 24th April, 1992, and subsequent conduct, the Defendant refused to give the plaintiff vacant possession of the suit premises.

In November, 1992 , the plaintiff decided to file this action against the Defendant; and on learning that the sell the machinery in the suit premises, obtained a 15 Exh. " P 16 " ) . temporary injunction retraining the Defendant from doing so ( i . e-. Defendant was about to

On 10th December, 1992 , the Defendant finally pulled out of the suit premises; and despite the existence of the said injunction, with almost all the machinery in the suit premises it went away 10 and left the suit premises an empty shell.

machinery taken away was listed by PW3 under Exh. "P 2 I" . and The it ended up in another factory in Ntinda which according to PW4

i I is ran by a Company called Britannia. I

In addition to ■the above , PW2 also told court that by the time the Asians left Uganda, the plaintiff had 5 machines in the suit premises. And these were , a German line which was 60 metres another line made in Britannia which was called ''Nairobi" , a waf e r machine used for manufacturing biscuits for hotels, another machine for manufacturing cream biscuits and a line for manufacturing sweets. l long ;

The value of those machines in 1972 was Ugs. 950m/=. However, subsequent Government tenants installed additional machines i n fC I the suit premises and the value of those machines was . Ugs. 800m/=. in 1980;

To crown it all, at the last valuation which was made in 1989 , by M/S Mungati and Drako surveyors, all the machinery at the suit premises was shown to be worth Ugs. 800m/=. IS

According to PW2, the said machinery remained operational until it was taken away by the Defendant from the suit premises on 10 th December, 1992 .

Although PW2 talked about the above figures, he could not back with documentary evidence since according to him the then up 20 Defendant had taken away all the relevant documents in that regard.

I ! I 7

Finally, the plaintiff prayed court to make orders in its favour as earlier on pointed out in the plaint.

am concerned, which court needs to resolve in this case , As far as I the following are the relevant issues

- 1. Whether the De fendant, at any given time , unlawfully *5* remained on the suit premises after the same had been repossessed by the plaintiff; and how long was the illegal stay? if it did, - 2. Whether the removal of the machinery from the suit premises by the Defendant on 10th December, 1992 , amounted to io detinue or conversion?

As far as the first issue is concerned, according to PW1, despite the fact that the plaintiff obtained a Repossession certificate ( i. e . Exh. "P9" ) in respect of the said premises until 10th December, 1992 . the suit premises on 1st April, 1992, the Defendant did not finally give it vacant possession of

All along , in between the said two dates, the plaintiff insisted upon being given possession o f the suit premises, but the so. Defendant refused to do

Much as the plaintiff may have expected to get vacant possession 2o fact that it had obtained a Repossession certificate in the of the suit premises as soon as it communicated to the Defendant

respect of the said premises*,* I think it w o u 1 d be a fair statement to say that the Defendant was entitled to some reasonable notice to vacate the suit premises.

how long is the notice which the Defendant was entitled to? The question now to answer is

According to section 9 of the Expropriated Properties Act (Act 9 of 1982 ) a tenant of a residential property which is the subject of repossession, is entitled to not less than ninety days notice to vacate the property in issue.

Unfortunately, the said Act throws light onno the length of /O notice which a tenant of a commercial property in circumstances similar to those above is entitled to.

However*,* it is common knowledge that commercial properties are in shorter supply in this country than the i r residential counterparts. *15*

Accordingly, I believe it would again be fair to say that a tenant of a commercial property which is the subject o f repossession, would need a longer period to find alternative than his residential counterpart; and hence the obvious need for him to have a longer notice to vacate such premises. 20 premises

According to Government policy (which is itself not law but whose existence Mr. Mubiru Kalenge counsel for the plaintiff) did not

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dispute*,* tenants of commercial premises like the one at hand ought to be given six months to leave the repossessed premises.

I certainly think that six months is a reasonable period to give an individual in repossessed commercial premises to vacate the same .

Accordingly, for the the said period is what court will apply. purposes of this case,

Be that as i t may , much as the Repossession Certificate (Exh. "P9" ) is dated 1st April, 1992 , and much as one o f the iette rs (Exh. "P10") which was written by the plaintiff to the Defendant ID is dated 9th April, 1992, it is not quite clear when exactly the Defendant first became aware that the suit premises had been repossessed and that it was required by the plaintiff to give it vacant possession of the same .

The said date would of course be important in enabling court to 15\* determine the day on which the notice to the Defendant to vacate the suit premises began to run and whether by 10th December, j992 when the Defendant finally relinquished possession of the suit premises, it was s t i 11 within the period o f six months referred to above? 7o

A perusal of Exh. " P11" which is the Defendant's first response the plaintiff*,* after i t was served with the Repossession to certificate in j. s s u e and the notification to vacate the su i t. premises, reveals that the said letter (Exh. written on 24th April, 1992 . "Pl1") was at least

In the absence of a clear date on record as to when the Defendant was actually served with the said documents, I thought that i t would be wise to regard the 24th day of April *,* 1992 *,* as the s surest day on which the Defendant should be taken firstexpressed awareness of the existence of the Repossess j. on Certificate in issue and notification to vacate the suit premises. to have

As a result of the above therefore, six months from the 24th of April, 1992, would enable court to fix the 24th ot October, 1992 , as the day on w h i c h the supposed to give vacant possession of the suit premises to the plainti f f. Defendant was

PW2 and PW3, the Defendant did not do the needful until 10th December, 1992 . 15 However, according to PW1,

Obviously, the above meant that from the 25th October, 1992 until the Defendant handed the plaintiff vacant possession of the suit premises, the Defendant was in unlawful possession of the said premises; and the illegal occupation of the suit premises was for period of forty eight days. a

**I**

As far as the second issue is concerned, retention of the possession of a Chattel, succeed , in detinue, or wrongful he must show, if the plaintiff is to

- (a) that he is entitled to immediate possession of the Chatte1; and - (b) that the Defendant detained the Chattel after the demand for its restoration had been made.

## ( see Saj na Singh v . Sardar Ali (1960 ) 1 ALL E. R. 2(5 9 and 5 Akisoferi Biteremo v. A. G. Civil Suit No. 659 of 1988) .

(See Ruthworth v. Taylar (184 2 ) 3 Q. B, 699 ) . The said demand must also be specific ( i . e . identifiable) meets all the essential requirements of the torts of detinue and conversion, and undoubtedly amounted to any of the two . However, to constitute conversion, the demand for the Chattel in issue must be unconditional,

As far as the third issue is concerned, in paragraph 8 o f the plaint, the plaintiff among other things, prayed that court would grant it the following declaration. \S

> (a) that the occupation of and refusal by the Defendant to y ie Id up the property comprised i n FREEHOLD REGISTER VOLUME 8 FOLIO 3 , 4 and 5 plot Nos. 124 , 125 and 126 at Kawempe up to the 11 th December 1992, was unlawful and unconstitutional. 2o

(b) The removal of the machinery by the Defendant was unlawful, and unconstitutional and the Defendant should ro

be ordered to return the machines removed to the plaintiff or in lieu thereof to pay the value of the machines at a cost to be determine by an expert appointed by Court".

Since in resolving the first issue above , court came to the -S conclusion that the Defendant's illegal occupation and refusal to yield up the suit premises effectively began on 25th October, 1992 , and ended on 10 th December*, ,* court would find1992 no difficulty in granting the declaration sought by the plaintiff under paragraph- 8 (a) o f the plaint, but with . the above modifications.

**1**

Again in resolving the second issue above, since to the conclusion that the removal of the machinery in issue by the Defendant from the suit premises on 10th December, 1992, amounted to detinue or conversion, I would not hesitate to grant the first part of the remedy sought by the plaintiff under paragraph 8 (b) of the plaint, that is to say *,* that the removal of the machinery in issue by the Defendant was unlawful and unconstitutional. court came

For the remaining part of the remedy sought by the plainti f f under paragraph 8(b) of the plaint, I have this to say. 2X>

the machinery taken away by the De fendant f row the su J t Since and its value are both fairly a sc e r ta i n ab 1 e , court doe s the need to appoint an I not see believe, there i s , on the other hand, premises expert for the same purpose. an urgent need to dispose

of this matter once and that is what I will do. and for all;

As far as the machinery in issue and its value are therefore concerned, PW2 testified that at the time the Ugandan Asians left this country, the plaintiff had 5 machines at the suit premises? and these were *,* 6 metres long? another *E,* commonly referred to as "Nairobi"; a wafer machine for manufacturing biscuits for hotels, another machine for manufacturing cream and a line tor manufacturing sweets. biscuits ? a German line which was line made in Britain and was

The value of the above machines was Ugs. 950m/- in 1972.

PW2 continued to tell court that subsequent Government tenants of the suit premises also brought in additional machinery around and the value of that additional machinery was Ugs. 800m/-. 1980 ?

PW2 also revealed to court that the original machinery (which was left by the Uganda Asians in the suit premises in 1972) and the *15* additional machinery (which w as later brought in the suit premises by subsequent Government tenants remained in good working condition until it was taken away by the Defendant in December 1992.

At this juncture, if we posed to understand the effect of the 2x> above evidence , we would discover that*,* among other things, it s u g g e s t s that the original machinery and the additional ma^hin^ry had roughly the s a m e v a J. u e 1 u the I 980s.

ID !

**I**

evidence on the above subject, h e further the suit premises was worth Ugs. 800m/=. Continuing with PW2's Mungati and Drako surveyors, it was shown that the machinery in told court that in 1989 when the last valuation was done by M/S

Although in giving the above evidence PW2 did not rely on any documents (because according to him, the Defendant took them away as it left the suit premises) he was fluent and firm his evidence, indicating that knew he what he was taIking about. (After all he had served the Ugandan Asians and subsequen t Government tenants of the suit premises who included the Defendant in various positions of responsibility in respect o f money matters!) in all

For the above reasons, I have no difficulty in accepting PW2 ' s evidence as a reliable account of the machinery in issue and its value at the t i m e the Defendant took i t away f rom the s u i t '5 premises on 10th December, 1992 .

Of course since we earlier on saw that both the o r i g i n a J' machinery and the additional machinery in the suit premises were more or less of equal value in the 19980's it is most likely that remained the case until all the machinery was lifted out of that io ; th£ suit premises by the Defendant in December, 19 9 2; for indeed both types of machinery just before they were taken away PW2 saw by the Defendant, but in testifying about them he never 1 o s t any of r.hem had its value. said that

time it was held wrongful $\mathbf{b}\mathbf{v}$ one in possession.......".

And in Heptalla Brothers Ltd. v. Janbhai Jeshangbhair [1957] E. A. 358 at P.362, Briggs J. A. had this to say about mesne profits,

"I understand mesne profits to be in England the particular form of damages ordered to be paid by a tenant who has held over".

There is no doubt in this case that the Defendant had wrongful possession of the suit premises or held over in respect thereof, between the 25th of October 1992, and the 10th of December, 1992, and would therefore rightly qualify to pay mesne profits.

In Eriasafu Kasuse v. Uganda Phermacuticals Ltd. Civil Suit No. 755 of 1988-it was emphasized that the measure of mesne profits is based on the amount of rent'it that rent represents the fair value of the premises. But if the value is higher than the rent, then the mesne profits must be assessed dat the higher value.

The question which immediately arises, is whether the figure of Ugs. $5m/=$ @ month of illegal stay by the Defendant in the suit premises which was given by PW1 above was based on the amount of rent for the suit premises; and if so, whether it represents the <pre>fair value of the suit premises?</pre>

$15$

$5$

I must confess that PWI left court in total darkness as to what

time it was held by one in wrongful possession II

And in Heptalla Brothers Ltd. 358 at P.362 , v. Janbhai Jeshangbhair [1957] E. A. Briggs J. A. had this to say about mesne profits,

"I understand mesne profits to be in England the ^5 , particular form o f damages ordered to be pal d b y a tenant who has held over".

doubt in that the Defendant had w r o n g t u 1 possession of the suit premises or held over in respect thereof. 1992 *,* io and would therefore rightly qualify to pay mesne profits. this case There is no between the 25th of October 1992, and the 10th of December,

In Eriasafu Kasuse v . Uganda Phermacuticals Ltd. Civil Suit No. emphasized that the measure ! 755 of 1988-1 t wa s is based on the amount of rent'it that rent represents the f a 1 r value of the premises. But if the value is higher than the rent , 15 ! then the mesne profits must be assessed dat the higher value. of mesne prof i. ts

The question which immediately arises, is whether the figure 1 5m/= 0 month of illegal stay by the Defendant in the su i t Ugs. premises which was given by PW1 above was based rent the suit premises; and if so, whether it represents the for fair value of the suit premises? on the amount of

i-1»a *VW* I left r »• da rkner *r* wh &gt; *f* i T mns\*' i n f n ta I

the above figure represents; how he cam by it . a n d h o w i t compares with the value of the suit premises!

In the circumstances, Court is unable to make any award under the head of "mesne profits".

The plaintiff.'s praye r f or i n herest i s also *,* i n my view *,* impossible to understand in so far as it is t i e d up w i t h paragraph 8 (c) of the plaint.

Not only was the remedy under the said paragraph abandoned, even declaration under it could be made, **r** fail to see how interest could have been meaningfully ordered in connection thereof. if it was not, and a

interest as prayed under paragraph 8 (c) of the plaint. I would therefore award no

thereof ( as ''Any other relief" C o u r t has deemed tit t. o give). This is so , because all the evidence on record loudly reveals that the plaintiff in u s t have s uf f e r damage as a r e s u I i of i.lie Defendant's wrongful occupation of the suit premises (as already shown above) and its unlawful detention or conversion of the machinery in issue. Although no general damages were specifically pleaded under thp plaint, I would award then to the plaintiff under paragraph 8

theretore a w a r d t h e platn ti tf a sum o t Ug s . I 0 m / -= » n T won ] d

*2\**

general damages.

I would also award the plaintiff costs of this suit.

All in all judgment is therefore entered in this case for the plaintiff against the Defendant in the following terms:-

- 1. A d e c 1 a r a t i o n t h a t the occupation o f and refusal by the Defendant to yield up the property comprised in FREEHOLD REGISTER VOL. 8 FOLIO 3,4, and 5 , plot Nos. .12 4, .1 2 5 and 126 at Kawempe from the 25th of October, 1992 , until, 10 th October, 1992 , was unlawful and unconstitutional is hereby made . - 2 . A declaration that the removal of the plaintiff's machinery by the Defendant from the suit premises on the 10 th o f December, 1992 , wa s unlawful and unconstitutional and t h •»t the Defendant should return the plaintiff's said machinery or pay the plaintiff Ugs. 350m/= in lieu the reo f i. s also hereby made. - 3. The Defendant is hereby ordered to pay the plaintiff th e sum of Ugs. 10 m / = in general damages. - The Defendant shall also pay the plaintiff costs o r t h i s 4 . suit.

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**E . S . LUGAYIZI**

JUDGE.

29/5/96

Read before: At 9.50 a. m.

Mr. Mubiru Kalenge for the plaintiff

Mr. Katarikawe Co. Secretary for plaintiff

Mr. **Mulindwa C/Clerk.**

E . S . LUGAYIZI

JUDGE.

29/5/96.

## Court

Judgment will be delivered in this case on notice.

## E. S. LUGAYIZI

5 AG. JUDGE. 30/4/96

29/5/96 .9,15 a.m

j 0 Mr. Mubiru Kalenge for plaintiff. Mr. Katarikawe Co. Sec for plaintiff present. **Mr.** Mulindwa Court Clerk.

### Court.

#### 15

This is my judgement. It is read.

E. S. LUGAYIZI

AG. JUDGE

20 29/5/96.

13/8/97-9.50 a.m:

M r . Mu l'i *\J e* z i f o r A pp I i c a nt.

- M r. Mub i ru f o r R e sp o n den t - **Mr.** Mulindwa Court Clerk 25

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA CIVIL SUIT NO. 746 OF 1992

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MUKISA FOODS LIMITED PLAINTIFF

# VERSUS

DEFENDANT NATIONAL ENTERPRISES CORPORATION

# DECREE IN ORIGINAL SUIT

This suit coming on this 29th day of May, 1996, for final disposal before Hon. Mr. Justice E. S. Lugayizi in the presence of MR. MUBIRU-KALENGE, Counsel for the Plaintiff.

## IT IS ORDERED AND DECREED that:

- (a) The occupation of and refusal by the defendant to yield up the property comprised in FREEHOLD REGISTER VOLUME 8, FOLIO 3, 4 AND 5, PLOT NUMBERS 124, AND 126 AT KAWEMPE from the 25th of October, 1992, until 10th December, 1992, was unlawful and unconstitutional. - (b) 'The removal of the Plaintiffs machinery by the Defendant from.the suit premises on the 10th of December, 1992, was unlawful and unconstitutional and that the Defendant should return the Plaintiffs said machinery or pay the Plaintiff U.' Shs.350m/= (Shillings Three Hundred Fifty Million only) in lieu thereof. - (c) The Defendant pay to the Plaintiff U. Shs.lOm/ = (Shillings Ten Million only) in general damages. - The Defendant pay the costs of this suit. (d)

GIVEN under my hand and .. 1996. the seal of this Court this day of.

JUDGE

# DRAWN DY:

M/S MUBIRU-KALENGE, BWANIKA AND COMPANY, ADVOCATES, . PLOT 42, KAMPALA ROAD, 4TH FLOOR, AFRICA HOUSE, P. O. BOX 8352, KAMEALA-