The High Court Commercial Division has awarded more than UGX 1.25 billion in compensation and damages to two traders after finding that the New Park Lockup Owners Association breached a binding resolution that guaranteed pioneer members ground-floor lockup shops in the redeveloped New Taxi Park.
In a judgment delivered on June 16, 2026, Justice Stephen Mubiru ruled in favour of Kakooza Hussein and Sarah Nabuuma Kakooza in their suit against the New Park Lockup Owners Association and eight of its officials over the allocation of lockup shops at the redeveloped New Taxi Park in Kampala.
The dispute stemmed from a redevelopment project initiated after Kampala Capital City Authority (KCCA) encouraged traders operating lockup shops around the New Taxi Park to form an association through which they could collectively obtain a lease and eventually acquire ownership interests in the property.
Court heard that during a members’ meeting held on December 11, 2010, it was resolved that original lockup owners, referred to as “pioneer members” or “landlords,” would be allocated ground-floor shops measuring 10 by 10 feet upon completion of the redevelopment project, provided they contributed to construction costs.
The plaintiffs argued that although they paid the revised contribution of UGX 88.5 million each after the association secured a loan to complete the project, they were denied the promised ground-floor units. Instead, they claimed the association converted the property into condominium units and later offered some of the units for sale to the general public, contrary to the original members’ resolution.
The defendants maintained that shop allocation was based on a “first pay, first allocate” principle and argued that the plaintiffs completed their payments after many of the ground-floor units had already been allocated. They further contended that new members enjoyed equal rights under the association’s governing documents.
However, Justice Mubiru found that the association had effectively waived strict payment deadlines by repeatedly extending them and by continuing to accept members’ contributions without issuing notices that time remained of the essence.
The judge held that once the association accepted late payments and adopted a loan-financing arrangement, it could not later rely on the original deadlines to deny pioneer members their rights without formally reinstating those conditions.
“The conduct of the association was consistent with abandonment of the original payment deadlines,” the court observed, noting that the plaintiffs eventually fulfilled all financial obligations required of them.
The court further ruled that the association and its directors owed fiduciary duties to members whose funds had been collected specifically for the redevelopment project. By opening ground-floor units to the general public before honouring commitments made to pioneer members, the association breached both contractual and fiduciary obligations.
Justice Mubiru rejected allegations of fraud, finding that the plaintiffs had not met the higher evidential threshold required to prove fraudulent conduct. Nonetheless, he concluded that the defendants had unlawfully failed to honour the rights created by the 2010 resolution.
The court ordered the defendants to immediately hand over vacant possession of lockup shop No. 763 and its corresponding condominium title to Sarah Nabuuma Kakooza.
The court also awarded her UGX 283.5 million in general damages for lost rental income resulting from the delay in receiving the property.
For Kakooza Hussein, the court found that no suitable ground-floor unit remained available for allocation. As a result, Justice Mubiru awarded him UGX 957.55 million in damages in lieu of specific performance, representing the estimated value of the lost property interest and anticipated rental income.
He was also awarded an additional UGX 15 million in general damages for the inconvenience and hardship suffered while pursuing the matter.
The court ordered that all monetary awards attract interest at 8 percent per annum from the date of judgment until full payment and directed the defendants to meet the costs of the suit.
The ruling is expected to have significant implications for property redevelopment projects involving member associations, particularly on the enforceability of resolutions passed at general meetings and the fiduciary obligations of association leaders handling members’ investments.
English 