The dispute began when Select Garments entered into a tenancy agreement with Old Stanley Hotel Limited to rent a portion of the Forest Mall in Kampala. Under the 2010 agreement, Select Garments was to pay a monthly rental rate, which was later mutually adjusted to USD 4,000 due to business downturns and property conditions.
However, Old Stanley issued an eviction notice in May 2014, alleging rental arrears totaling USD 293,070 and subsequently denied Select Garments access to the premises. This prompted the Plaintiff to contest the arrears claim and seek compensation for wrongful eviction and property conversion.
A key issue in the case was whether the original lease agreement was modified when the Defendant accepted a reduced monthly rent. Select Garments argued that Old Stanley’s acceptance of the reduced rate constituted a waiver, creating a legally binding revision to the contract.
Justice Rubagumya ruled that through consistent acceptance of USD 4,000 as the monthly rent from January 2013 to May 2014, Old Stanley had indeed waived its right to enforce the original rent.
This established a precedent for implied modification of written contracts through consistent conduct, reinforcing the principle that actions and acceptance by parties can reflect legally binding changes.
Moreover, the court condemned Old Stanley’s actions of locking the premises, confiscating Select Garments’ property, and violating court-issued interim orders, which restrained them from evicting the tenant. Justice Rubagumya highlighted that disobedience of court orders undermines judicial authority and fairness.
The ruling awarded Select Garments relief, including a declaration that the Plaintiff was not in arrears, recognition of the wrongful eviction, and compensation for the unlawful seizure of property.
This decision underscores the importance of fair landlord-tenant relations, contractual adherence, and the power of consistent conduct in modifying contractual terms.
This landmark judgment is expected to have a lasting impact on tenant rights and landlord obligations in Uganda, emphasizing the sanctity of mutually adjusted agreements and the binding nature of judicial orders.