Muwema & Co. Advocates has announced that it will appeal the High Court (Commercial Division) ruling that ordered the firm to pay rent arrears, mesne profits, and general damages, and to vacate its offices at Plot 50 Windsor Crescent Road in Kololo.
The judgment, delivered by Justice Patricia Mutesi, ordered the law firm to pay $148,300 (UGX 533.3m) in rent arrears as of May 30, 2023, $224,000 (UGX 805.5m) in mesne profits, and UGX 50,000,000 in general damages, in addition to granting an order for vacant possession of the premises.
“We are appealing”
In a statement issued a day after the ruling, the firm confirmed its dissatisfaction with the decision and indicated that it intends to challenge it at the appellate level.
“We are dissatisfied with the judgment of the court due to its factual and legal inconsistencies, which contradict established precedent. We, therefore, intend to appeal the decision…”
The firm sets out several grounds upon which it intends to base its appeal.
First, it argues that the trial judge erred in awarding rent arrears of $148,300 as of May 30, 2023, while allegedly ignoring evidence of payments made toward that claim.
Second, Muwema & Co. challenges the award of $224,000 in mesne profits, contending that wrongful possession was neither properly pleaded nor proved.
“The trial Judge erred in awarding mesne profits of $224,000 on the ground of wrongful possession of the lease premises, whereas Downtown did not plead or prove any amount of mesne profits nor file any case for wrongful possession,” the firm states.
Third, the firm disputes the court’s interpretation of its contractual right to purchase the property under the lease agreement.
“The trial Judge erred in law and fact by finding that we did not enjoy the right to purchase the property despite exercising our option to purchase it.”
It further contends that the court misapplied provisions of the Land Act in reaching that conclusion.
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In its statement, the firm also takes issue with what it describes as media coverage that has “negatively sensationalised the judgment without appreciating the proper context of the case.”
Muwema & Co. maintains that it exercised its option to purchase the property in August 2021 by offering $1.05m (UGX 3.77b) for approximately 60 decimals of land, a figure it says reflected prevailing market rates at the time.
The firm argues that once the purchase option was exercised, it ceased to be a tenant and became, in its words, “a purchaser in waiting,” meaning the landlord was entitled to receive the purchase price rather than continued rent.
It further states that during court mediation, it paid up to $130,000 (UGX467.4m) toward the disputed sum while awaiting a counteroffer on the proposed sale.
What happens next?
With the firm now formally indicating its intention to appeal, the dispute is expected to move to the Court of Appeal, where questions surrounding lease interpretation, the legal effect of exercising an option to purchase, and the basis for awarding mesne profits are likely to be re-examined.
In its concluding remarks, the firm states that “we are committed to the lawful pursuit of our right to purchase the premises through the justice system until its logical conclusion.”
The appeal will now determine whether the High Court’s findings stand or whether the contested legal and factual issues warrant reconsideration at the appellate level.
