THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
MISCELLANEOUS APPLICATION NO. 38 OF 2010
TUSTER MATTRESSES (U):::::::::::::::::: APPLICANT
V E R S U S
ROYAL CARE PHARMACEUTICALS LTD::::::::::::::::::: RESPONDENT
BEFORE: LADY JUSTICE HELLEN OBURA.
b) The applicant is not indebted to the respondent to the amount claimed.
c) It is just and equitable that this application is allowed.
A brief background of this application is that on the 1st of November 2010 the respondent/plaintiff filed a summary suit against the applicant (the 3rd defendant) and two others under O.36 rr 1, 2 &3 of the CPR for recovery of a sum of U.Shs. 400,000,000= (Shillings four hundred million only) being rent arrears and costs of the suit.
The basis of the claim as contained in the plaint in summary suit and the affidavit in support is that on the 1st day of December 2008, the respondent/plaintiff entered into tenancy agreement with the 1st and 2nd defendants in respect to plot 1336 Portbell Road, covering the ground, 1st, 2nd, 3rd, 4th and 5th floors for monthly rent of Ushs.50, 000,000=.
That the defendants continued paying rent until 1st March 2010 when they stopped and started giving excuses to the plaintiff. That upon the plaintiff demanding for rent, the 3rd defendant/applicant came up to acknowledge tenancy. That despite several reminders, the applicant refused and/ or neglected to clear the debt despite the fact that it has no defence, hence the summary suit.
The applicant then filed this application seeking for leave to appear and defend the summary suit. The averments in the affidavit in support of this application gave the applicant’s side of the story highlighting the chronology of events/transactions between the parties but denied that rent is due and owing.
3. “That I am aware that in the Kitintale branch, the applicant occupied part of the ground floor, part of the basement and part of the offices below the basement. However, the rest of the space and the1st and 2nd floors were not complete and they were used by the 1st defendant in HCCS No. 393 of 2010 as storage.(A bundle of photographs of the Kitintale branch before renovation are herein attached and marked annexure “A”)”.
4. “That I am aware that, following a verbal agreement with the respondent, upon entering the premises the applicant embarked upon renovation strategies that saw it renovate, transform and consequently occupy all the floors. (A breakdown of all renovation done and monies spent is herein attached and marked annexure “B”)”.
5. “That I am aware that the said renovation caused the applicant to re-arrange the set up of the shop, with the consent of the respondent, wherein the space of other existing tenants like Goodmeat Uganda Ltd was bought/taken over and others like DTB Bank had their contracts renegotiated to allow them to be moved from their current location, a process that is still on-going. (A copy of the Goodmeat space takeover MOU dated24th June 2010 and the DTB addendum dated 2nd September 2010 are herein attached and marked annexure “C” and “D” respectively)”.
6. “That I am aware that due to the above changes no rental contract was entered into or rent payment made as there was no defined space description from which the same could be computed”.
7. “That I am aware that in March 2010 at the time of the takeover, a reconciliation was done based on invoices issued by the said first defendant in HCCS 393 of 2010 ( a copy of a bundle of the said invoices are attached herein and marked annexure “E”)”.
8. “That I am aware that an invoice dated30th June 2010 had under clause (4), an estimation of the rent for Kitintale for the months of 16th Feb 2010 to 16th August 2010, an amount that was part of the items negotiated for that culminated in the signing of the MOU dated 13th July 2010 (a copy of the MOU is attached herein and marked annexure “F”)”.
9. “That I am reliably informed by our bankers, Diamond Trust Bank, which information I verily believe to be true, that the money agreed upon at the time of signing the MOU dated3rd July 2010 has to date been remitted to the accounts of the first defendant”.
11. “That I was directed to afford a copy of the MOU and the rental agreement to Dr. Gilbert Ohairwe to sign as agreed by him and his co-director of his three companies, GKO Medicines, Half Price Supermarket and Royal Care Pharmaceuticals Ltd one Tanya Ermoshkins, so that all rental arrears could be cleared. (A copy of the MOU and the rental agreement are herein attached and marked annexure “G” and “H” respectively)”.
12. “That upon delivery of the said MOU and rental agreement I was informed, on the same day by the Kitintale branch manager one John Kimani, which information I verily believe to be true, that a suit had been filed against Tusker Mattresses (U) Ltd for non-payment of rent on the same date1st November 2010”.
13. “That the assertion that there are rental arrears is baseless and unfounded as the tenant, Tusker Mattresses (U) Ltd duly paid rent for the months of March to the month of June as explained in paragraphs 7, 8, and 9 above”.
14. “That Tusker Mattresses (U) Ltd has not in any manner or form refused or neglected to pay any owed rent to the land lord Royal Care Pharmaceuticals rather the process has been frustrated, aggravated and provoked by the landlord’s omission to keep his words to the premise”.
15. “That the landlord, the respondent herein, has failed to acknowledge receipt of the money paid for the months of March to July 13th yet he is the same signatory for all businesses conducted between Tusker Mattresses (U) Ltd and the plaintiff, 1st and 2nd defendant companies to which he and one Tanya Ermoshkins are the sole directors to all the three afore mentioned companies”.
He further submitted that paragraphs 10 and 11 of the affidavit state quite clearly that there is a Memorandum of Understanding (MOU) describing the exact space occupied and money owed by the applicant from 13th July 2010 to 13th November 2010. Further that the MOU and the rental agreement with the terms agreed upon by the applicant, Dr. Gilbert Ohairwe and his Co-Director of his three companies, GKO Medicines, Half Price Supermarket and Royal Care Pharmaceuticals Ltd (the 1st & 2nd defendants and the plaintiff in HCCS No. 393 of 2010) was sent by the applicant from its headquarters in Nairobi to Dr. Gilbert Ohairwe to sign for purposes of covering rent for the rest of the tenancy period.
He also pointed out that his client carried out some renovations on the building which should be offset from the rent due to the respondent by way of counter claim in the main suit if this application is granted.
He submitted that there are triable issues that have been raised in the affidavit in support of this application which court should determine. That the triable issues are: whether the tenancy agreement relied upon by the respondent applies to the current relationship between the applicant and the respondent; whether rent is due and in the alternative but without prejudice that if rent is due, then cost of renovation needs to be offset from the amount claimed by way of counter claim.
He concluded his submission by citing the case of HASMANI –V- BANQUE DU CONGO  EACA 88 where it was held that all the defendant has to show is that there is a triable issue of law and fact. Similarly, he cited the case of TWNTSHAE OVERSEAS TRADING CO. LTD –VS- BOMBAY GARAGE LTD  EA 741, where it was held that the defendant must by affidavit disclose a triable issue in order for an application for leave to appear and defend to succeed.
Mr. Osinde submitted that all the documents attached by the applicant as proof of payment of rent from March to July 2010 have nothing to do with rent and the respondent was not party to them. That the MOU was for good will payment to Good Meat (U) Ltd while the invoices were for payments to G.K.O. Medicines, a separate entity.
He concluded that this application is only intended to waste court’s time because the applicant has failed to show in any way in the affidavit in support that there is a triable issue to justify grant of leave to appear and defend the main suit.
He prayed that court finds it expedient and dismiss this application with cost to the respondent and enter judgment for the sum prayed.
The main issue for determination in this application is therefore whether the defendant/applicant has by affidavit or otherwise disclosed a triable issue.
I agree with the submission of counsel for the applicant that the contention of the applicant raises a triable issue of law, that is, whether the tenancy agreement relied upon by the respondent to bring its claim applies to the current relationship between the applicant and the respondent.
This contention in the affidavit regarding renovation was never rebutted by the affidavit in reply. Counsel for the respondent did not also address the issue when he was responding to the submission by counsel for the applicant on the issue. This implies that it is not disputed that the applicant carried out some renovations. I am satisfied that this also raises a triable issue of counter claim in the main suit which cannot be ignored.
However, since it is not in dispute that the applicant has been in occupation of the respondent’s premises with effect from March, 2010, it follows that eventually rent will have to be paid when the issues of tenancy and the period for which rent is due are determined by this court. In the circumstances, I will grant the applicant conditional leave to appear and defend the main suit.
In the result, I order that 50% of the U.Shs. 400,000,000= claimed in the plaint in summary suit be deposited in court before the applicant/defendant files its Written Statement of Defence which must be filed within fifteen days from the date of this ruling.
2. Mr. Nathan Osinde for the respondent
3. Ms. Ruth Naisamula Court Clerk