By Daniel K. Kalinaki
May 1, 2004
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�I paid 10%. Then they said no, its been repossessed� KAMPALA - A senior Cabinet minister wants the National Housing & Construction Company to buy a residential house at Shs 420 million and then sell it to him at a lower price and on softer terms, The Monitor has learnt. However, Mr Kirunda Kivejinja, who is the minister in charge of the Presidency, says he is willing to settle for another house of the value agreed on earlier with the company. The house in contention is on Plot 7, Mackenzie Vale, in Kololo, an upmarket city suburb. The Monitor has learnt that the minister has occupied the house for a long time, while paying rent to NHCC, and had also entered arrangements to buy the house from the company at Shs 280m. He paid a 10 per cent deposit.
However, the house was later repossessed by its former Asian owner, who offered to sell it to Kivejinja, but at a higher price than the minister had initially agreed with NHCC. On August 7, 2000, Kivejinja's lawyers, M/s Kibeedi & Co. Advocates, wrote to NHCC exploring the possibility of salvaging the old agreement. The lawyers also included an 'alternative means of performance,' in which they required NHCC to buy the house and pass it on to the minister under favourable, and cheaper terms. On January 28, 2004, NHCC's lawyers, Ssawa, Mutaawe & Co. Advocates wrote to Kivejinja rejecting the proposal. "The alternative means of performance which you suggest or advise involves our Client in entering an agreement which is injurious to the public or against the public good and, is invalidated on the grounds of public policy," NHCC's lawyers wrote. The letter adds: "Essentially, we all know that National Housing is a public entity. To require the Company to purchase a house for Shs 420,000,000 so as to sell it to you on a long-term mortgage of either 8 or 15 years, and for Shs 280-290 million only, is clearly against the public interest. "Moreover where the property in question has been offered to you by the Decree holders/repossessing owners for Shs 420,000,000 and you have accepted to buy it at that price. Why then should a public company buy it at that higher price and then resell it to you at a gross undervalue?" Illegal conduct The lawyers also question the minister's conduct over the matter and write: "Even if that conduct (i.e., which is involved in your advised alternative means of performance) were not actually unlawful, it would still be "illegal" so long as it involves conduct, which the law disapproves as being contrary to the interest on the public." In its letter, the law firm also argues that it would be illegal for the management of NHCC, which is one of the parastatals being prepared for privatisation, to enter into an agreement in which it would lose money. Quoting the Public Enterprises Reform Divestiture Act, the lawyers wrote: "No chief executive, director, secretary, manager or other employee of a public enterprise shall do any act knowing or having reason to believe that the act or omission will cause financial loss to that public enterprise." In their letter to the NHCC's lawyers, Kivejinja's lawyers said they reserved the right to go to court if there was no breakthrough in the negotiations over the matter. But the NHCC lawyers argue that the courts "will not enforce a contract whose formation, purpose and or performance involves a breach of a statutory prohibition.� "The further pursuit of yourgoodself of the suggested alternative means of performance will also be vitiated and invalidated on account of duress and undue influence," the lawyers add. The letter is copied to the minister of state for Privatisation, the Attorney General, the director of the Privatisation Unit, NHCC, and Kivejinja's lawyers. Kivejinja reacts Kivejinja defended himself in a telephone conversation with The Monitor. "It was government policy that government should sell its property with 1st priority to sitting tenants. I applied. NHCC did not act until belatedly. I paid 10%. Then they said no, its been repossessed. �Hence we said let NHCC buy and repossess and sell to me or sell me another house. NHCC wrote to my lawyer and said we are interested in purchasing. �The Indian came to me and said we are willing to sell. I approached NHCC who now prefer to back out of the deal. �They had told the Indian to hold onto the property while they negotiate the price. If it proves difficult I am open to discussing with NHCC about a different house within the acceptable price range," the minister wrote. Senior managers at NHCC declined to comment. However, in the letter that their lawyers wrote to Kivejinja, they addressed the issue of Kivejinja's deposit to NHCC. "Finally, Sir," the lawyers wrote, "you mentioned the issue of the deposit you paid. "Generally, (and this depends on the circumstances of the contract), after frustration of the contract to sell and transfer the property to you (where consideration had wholly failed), National Housing would have refunded the deposit paid. "But until a certain date, you were liable to pay rent to National Housing and according to the agreement between National Housing and yourgoodself, if the sale were abortive the deposit would be reconverted to rent." The lawyers added: "Therefore, by a copy of this letter, we are requesting them to reconcile their records and come up with the position as to who owes who and how much." However, Attorney General Francis Ayume told The Monitor this week that he was aware of the matter and had been consulted on it by Kivejinja. |
� 2004 The Monitor Publications
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