Muwema & Company Advocates has announced it is going to appeal a High Court judgment that ordered the firm to pay shs14 billion (USD 148,300) in rent arrears.
The same judgement ordered them to pay USD 224,000 in mesne profits, shs50 million in general damages, and to vacate its offices at Plot 50 Windsor Crescent Road, Kololo.
In her judgment, Justice Patricia Mutesi held that the law firm has no legal basis to continue occupying the contested premises. The dispute arises from a lease disagreement with the property owner, Down Town Investments Limited.
The High Court found Muwema & Co. liable for breaching a 2014 lease agreement under which the firm agreed to pay $5,000 monthly plus VAT, with a 10% annual increase after the first two years.
The lease expired in 2019, but the firm continued occupying the premises, prompting Downtown Investments to sue in 2023. The plaintiff sought $148,300 in arrears, mesne profits, general damages, interest, and costs.
According to the court, the tenants defaulted repeatedly, paying late or not at all despite partial settlement of $50,000 in June 2023 and multiple demand notices.
Efforts by Downtown to re-enter the property after terminating the lease in May and July 2023 were blocked.
Muwema & Co., including partners Muwema and Kagoro, defended their position, arguing that the rent increases were never mutually agreed upon and that they had paid over $850,000 overall.
They also claimed to have spent $186,000 on repairs to the “desolate” property, which the landlord failed to reimburse. Crucially, they invoked a lease clause granting first option to buy, offering $1,050,000 in August 2021, arguing that this shifted their status from tenants to buyers and that subsequent payments should count toward the purchase price.
Justice Mutesi rejected these claims, noting that no sale occurred as the offer was not accepted. “It is inconceivable that any person… would believe that there was an actual or putative sale,” she wrote, citing contract law requiring absolute acceptance.
The court deemed the rent increases automatic, dismissed the repair costs as unproven, and noted that the firm’s payments up to 2021 implied acceptance of the lease terms.
In a statement, Muwema and Company Advocates said they will appeal against the judgement and its orders.
According to the law firm, it entered a five-year renewable lease in 2016 that included an option to purchase the property.
The firm said it exercised this option in August 2021, offering USD 1,050,000 for approximately 60 decimals of land, a rate aligned with Kololo market values.
Muwema & Co. asserts that despite repeated requests, Downtown failed to negotiate a market-based sale or issue a counteroffer, instead demanding increased rent.
“Muwema & Co. had ceased to be tenants and had become purchasers in waiting,” the statement reads, adding that the firm had already paid USD 130,000 toward the disputed rent during court-mediated talks.
The law firm says the High Court order overlooked this payment, improperly awarded mesne profits without evidence, and disregarded their lawful right to purchase the property.
“The trial Judge erred by awarding Downtown rent arrears of USD 148,300 as of 30th May 2023 while ignoring the available evidence on the record showing a payment of USD 130,000 against that claim,” Muwema says.
“The trial Judge erred in law and fact by finding that we did not enjoy the right to purchase the property despite exercising our option to purchase it. In doing so, the trial Judge erroneously relied on S.36 Land Act Cap 236 granting an option to purchase to tenants by occupancy, which we are not.”
Regarding mesne profits, Muwema & Co. said, “The trial Judge erred when she awarded mesne profits of USD 224,000 on ground of wrongful possession of the lease premises whereas Downtown did not plead or prove any amount of mesne profits nor file any case for wrongful possession.”
“We are committed to the lawful pursuit of our right to purchase the premises through the justice system until its logical conclusion. We assure our clients, partners and the general public to continue expecting our experienced, driven and effective service.”
