Court rewards National Housing tenant sh141.4m
Justice Harriet Grace Magala awarded Kwesigabo Sh91,488,192 in special damages and Sh50m in general damages, bringing the award to Sh141,488,192, excluding interest and costs.
The judge also ordered National Housing to pay interest at 18% per annum on the Sh91,488,192 from 2018 until the date of the decree, as well as the costs of the suit. (File photo)
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The High Court Commercial Division has ordered National Housing and Construction Company Ltd to pay former tenant Johnson Kwesigabo sh141.4m after finding that the company received Government subsidy money meant to refund part of the purchase price of his Buganda Road flat.
Justice Harriet Grace Magala awarded Kwesigabo Sh91,488,192 in special damages and Sh50m in general damages, bringing the award to Sh141,488,192, excluding interest and costs.
The judge also ordered National Housing to pay interest at 18% per annum on the Sh91,488,192 from 2018 until the date of the decree, as well as the costs of the suit.
Kwesigabo had sued National Housing seeking a refund of Sh91,488,192, general damages, interest and costs, claiming that he was forced to purchase Flat 660F on Buganda Road at Sh142,488,192.
He told court that before the purchase, he and other tenants petitioned the President, who directed that the flats be sold at Sh51m and that Government provide a Sh59m subsidy for each eligible tenant.
The Government subsequently paid National Housing Sh7.347b in subsidy money. According to the evidence, the amount included Sh91,488,192 due to Kwesigabo as a refund.
However, National Housing declined to refund him.
Kwesigabo’s lawyers, Hannington Mutebi of KBW Advocates and Fred Byamukama of MACB Advocates, argued that the sale agreement was signed under coercion because the tenant faced eviction if he did not sign.
The lawyers further submitted that National Housing had been unjustly enriched because the Government had paid the subsidy, including the amount due to their client.
National Housing, represented by Ruth Kisakye from its legal department, denied the claim.
The company argued that the sale agreement was entered into voluntarily after the parties agreed on the purchase price. It said the Government subsidy did not vary the terms of the agreement.
The company also relied on an opinion of the Solicitor General, which advised that Kwesigabo did not fall within the category of civil servants intended to benefit from the subsidy.
Justice Magala, however, found that National Housing had not pleaded Kwesigabo’s alleged ineligibility for the subsidy in its written defence.
The judge said the issue only arose during the evidence of the company’s witness, Emma Wangota, and that the company did not amend its defence to raise it.
The judge said parties should not be allowed to introduce a new defence at trial without amending their pleadings because pleadings are intended to disclose each party’s case and prevent trial by ambush.
On the allegation of coercion, the judge found that Kwesigabo was not forced to sign the sale agreement.
The court noted that National Housing had made a fresh offer on December 8, 2011, which disregarded earlier communications on the price. Kwesigabo accepted it on December 29, 2011, acknowledging a 10% discount, and the parties signed the sale agreement on January 19, 2012.
The court therefore found the sale agreement valid and held that Kwesigabo could not rely on an alleged conditional acceptance to vary its terms.
However, Justice Magala found that the Government’s directive applied to sitting tenants, including Kwesigabo.
The judge noted that National Housing did not dispute that he had been a sitting tenant before purchasing the flat and that the Government had paid the company the subsidy.
The court further found that Kwesigabo had proved that he was appointed to public service and had worked for the Government in various capacities.
Justice Magala said National Housing failed to prove that he did not complete his probation or that he had not worked in public service.
The court consequently found that Kwesigabo qualified for the subsidy and was entitled to the refund, holding that National Housing could not retain the money that had been paid to it for his benefit.
The court awarded Kwesigabo Sh50m in general damages for the inconvenience caused by National Housing’s failure to refund the money since 2018.
However, the judge declined to award the Sh100m exemplary damages sought, finding that National Housing had acted on the Solicitor General’s advice and had also attempted to verify Kwesigabo’s status with the Ministry of Public Service. The court said there was no malice or ill will on the company’s part.
The court also rejected the claim that National Housing should compensate Kwesigabo for the hardship of obtaining a Sh75m loan from Housing Finance Bank, noting that the subsidy was granted after the purchase had been completed.