The Kampala Capital City Authority (KCCA) has been blocked by the Court of Appeal from leasing a piece of Land under dispute.
In 2008, the then Kampala City Council (KCC) leased the land on Port Bell Road, Kiswa in Nakawa Division measuring 0.092 hectares to Nowomugisha Shadrack Nzaire, a businessman for five years.
However, the lease was extendable to 49 years subject to payment of rent, substantial performance by Nzaire, or no breach of the agreements. According to the agreement, Nzaire was supposed to construct Hostel and Apartments on the Land.
In May 2011, the Kampala District Land Board wrote to Nzaire granting him consent to transfer the lease. He however transferred the lease to A. Dean and Company Advocates who was registered as the owner of the lease in 2012.
In 2013 the company wrote to KCCA for the extension of the lease to access funding from financiers, but the Director of Legal Affairs KCCA rejected saying that the controlling authority over the land was Kampala District Land Board but not KCCA.
KCCA however terminated the lease on grounds that the leaseholder had not fulfilled the development obligations in the lease agreement and the lease period of Five years expired without applying for a renewal.
Wycliffe Mulindwa, the Director of A Dean Company petitioned the High Court challenging the actions of KCCA which included the failure to approve the architectural drawings and terminating the lease on grounds of expiry of the lease and non-compliance.
Mulindwa also told the court, that he was not given a fair hearing before the termination of the lease. Mulindwa asked the court to quash KCCA’s decision not to extend the lease and also to put an injunction on the land restricting KCCA from leasing the land.
But Caleb Mugisha from KCCA told the High Court in Nakawa that KCCA leased the land to Nzaire and he was supposed to erect a hostel and apartments on the land in the period of five years which he did not. Mugisha also told the court that Nzaire was using the land as a washing bay which was a breach of the agreement.
Mugisha further told the court that Nzaire was supposed to pay KCCA rent of 1.8 million Shillings which he defaulted.
The High Court ruled in favor of KCCA because Nzire had breached the contract.
But the company petitioned the Court of Appeal. In the ruling, Justice Stephen Musota said that the High Court erred in law and fact when it held that the company which was the registered proprietor of the lease was not entitled to a hearing on whether the lease term would be extended or not.
“I would find that indeed the learned trial Judge erred in law and fact when he held that the Appellant which was registered as proprietor of the leasehold suit land as transferee and had been in possession thereof with the knowledge of the respondent was not entitled to apply for judicial review of the respondent's decision not to extend the lease” Justice Musota stated in the document.
Justice Musota, Justice Catherine Bamugemereire, and justice Richard Buteera ruled that the High Court ruling be set aside. They also ordered KCCA to give a fair hearing to Dean Company before a decision is made on whether to renew the lease or not.
The justices also issued an injunction stopping KCCA from leasing the land to any person until they have given Dean Company a fair hearing.
