KACITA slapped with Shs215m court fines after losing case against Kampala landlords

The Crane Management Services Ltd have filed a court bill worth Shs215m against the Kampala City Traders Association (KACITA) as compensation for the legal costs incurred in the case barring the collection of rent arrears accrued last year during the first phase of Covid-19 lockdown.

KACITA, 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 when the business community was under lockdown.

In April this year, the High Court dismissed the case citing the failure of the traders’ association (Kacita) to prosecute their case. The court also ordered that KACITA should pay legal costs incurred by Crane Management Services and the other 16 accused parties.

Other parties involved in the case are; 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.

Background

In May 7, 2020, Kacita also petitioned the national task force for the fight against Coronavirus in the Office of the Prime Minister seeking 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 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.