Crane Management Services Ltd have filed a UGX 215 million court bill against Kampala City Traders Association (KACITA) as compensation for the legal costs.

KACITA was seeking for orders to stop Crane Management Services Ltd and 16 other landlords from collecting three months’ rent arrears that accrued when arcades closed during the 2020 lockdown.

In April, the High Court dismissed the case citing failure of the traders’ association to prosecute their case.

The court then ordered Kacita to pay legal costs incurred by Crane Management Services and the other 16 accused parties.

The other accused parties included; Ntake Bakery Limited, Apple Properties Limited, Godfrey Kyeswa, Aponye House Limited, James Mugabi, Drake Lubega, Ham Enterprises Limited, Mansur Matovu alias Yanga, Christine Nabukeera, Daudi Mutebi, Yebaza Joseph, Ahmed Zziwa, Tom Kitandwe, Godfrey Kirumira Kalule, Twese Enterprises Limited and Mutaasa Kafeero.

KACITA Uganda Limited claiming to represent 38 of its members, had sued the seventeen landlords for orders to stop the landlords from paying rent arrears for three months of March, April and May of 2020.

On May 7, 2020, Kacita also petitioned the Office of the Prime Minister seeking for intervention to compel the landlords to waive the rent arrears since the traders did not work due to the lockdown.

They had asked the government to declare that the three months was a loss to the entire economy and therefore no rent obligation will be accrued to tenants for both commercial premises and rentable apartments or that when landlords file their annual returns for the year 2020/21, their rental income tax obligations should be waived against the three which they never earned.

But in their defence, Crane Management Services Limited argued that the case did not disclose any cause of action against it and asked that the case be dismissed.

The company argued that Kacita had brought the case in bad faith on behalf of an alleged group of purported tenants who none the less comprise less than 1 percent of all the tenants they collectively have as downtown landlords without the express authority of the vast majority of genuine tenants that enjoy cordial relationships with their landlords.

Crane Management Services Limited under the proprietorship of Dr Sudhir Ruparelia is a member of Kacita but it did not authorise, consent to and or approved the institution of the case (against landlords) and that the relationship between it and the tenants is governed by tenancy agreements which clearly define the obligations of the parties therein.

Court documents show that notwithstanding the closure of shops and prohibition against the sale of non-food items by the government, it continued to pay its taxes and or bills such as water, electricity, bank loan facilities and security for the malls and arcades.

Stories Continues after ad

The Kampala High Court has dismissed the application in which Simbamanyo  Estates Limited wanted to block the transfer of Simbamanyo house to Equity Bank.  The property was meant to recover an outstanding loan of Shs 40 billion.

In February 17, 2021, the Commercial Court  issued an order okaying the take over of the building which was later sold to Meera Investments through public auction. the order followed Simbamanyo  Estates’ decision  to withdraw application in which  challenged the take over of the Estate.

In her ruling earlier today, justice Susan Abinyo said Simbamanyo  Estates failed to present solid evidence regarding the matter. She ordered Simbamanyo  Estates to meet all costs that Equity Bank, Meera Investments, Commissioner Land Registration and Luwaluwa Investments incurred.

” Costs of this appeal are awarded to respondents, She ruled. Court also dismissed all grounds that Simbamanyo  Estates presented to regain its Estate which was sold by Public Auction.

” Stopping the sale of Simbamanyo  Estates  would have infringed on the bank’s right to be heard and inconvenience the team which organised and advertised  on September, 8, 2020 confirming  that the property would be auctioned on October 8, 2020.” She ruled.

Simbamanyo Estates Limited lost property, Afrique Suites Hotel and Simbamanyo House over a $10.8 million loan acquired from Equity Bank.

Last year, the  Estate lost Simbamanyo House located on plot 2 Lumumba Avenue after it failed to service the loan. The building had been mortgaged by its owners with Equity Bank but after failing to pay, the exercise was conducted through public bidding on October 8 by Equity Bank Limited.

According to documents seen by EagleOnline, the hotel was sold the same day as Simbamanyo House was sold.

According to court documents filed in the Commercial Division of the High Court, on August 20, 2012, Equity Bank Kenya and Equity Bank Uganda entered into a loan agreement in which the two banks agreed to advance Simbamanyo with $6m.

The loans, which would make up a consolidated sum of $8.10m (Shs29.83b) including interest and operational fees, among others, sought to finance the construction of Afrique Suites Hotel in Mutungo, Luzira northeast of Kampala and facilitate the takeover of a prior facility advanced to Simbamanyo by Shelter Afrique.

History of the loans

The two banks, details indicate, pooled money together with at least $3.5m drawn from Equity Bank Kenya and $2.5m from Equity Bank Uganda. However, Simbamanyo Estates challenged the outstanding sum, saying it is only aware of $7.19m (Shs26.48b).

In its defence, Equity indicates that Sambamanyo benefited and was aware of every financial transaction that was advanced to it. Equity also argued that Bank One, based in Mauritius, was drafted into the transaction on the request of Simbamanyo, which had sought to obtain bridge financing of up to $10m.

In the same spirit, Simbamanyo Estates Limited withdrew their application in which they were seeking to stop the takeover of its property on Lumumba Avenue. They had petitioned the Court of Appeal seeking orders to maintain the status quo stopping the sale of their property by Equity Bank which is seeking to recover loans worth $10.8 million (Shs40 billion).

Court documents indicate that upon issuance of the High Court order on September 7 last year, the bank advertised their property, and was meant to and finally sold on October 8.

Stories Continues after ad