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Case Brief · caselaw.co.ke
Court of AppealPartially AllowedNot stated in the judgment as provided

East African Power and Lighting Co Ltd v Attorney General [1978] KECA 3 (KLR)

Court of Appeal
22 November 1978
3,363 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled that occupying premises with rent paid creates a monthly tenancy that only written notice can end, awarding landlords far more compensation.

What this practically means

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Executive summary

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This appeal concerned the twelfth floor of Electricity House, Nairobi, occupied from April 1971 by the National Social Security Fund, a statutory fund without legal capacity to contract, during negotiations for a six-year formal lease to the Ministry of Works at an agreed rent. No lease was ever executed. The NSSF vacated in April 1973 without notice, and the landlords sued the Government for arrears of rent and related charges, contending there was a monthly tenancy never terminated by notice. Muli J held the relationship was a tenancy at will by implication of law, validly terminated without notice, and further found a valid surrender arising from keys handed to the landlords' watchman; he awarded only Shs 3,143/05. The Court of Appeal, in a judgment by Law JA concurred in by Wambuzi JA and Sir James Wicks CJ, allowed the appeal. It held that where a tenant enters possession with the landlord's consent and rent is paid and accepted, section 106 of the Transfer of Property Act deems a monthly tenancy to exist, terminable only by fifteen days' written notice, none of which was given. A tenancy at will can arise in Kenya only by express agreement, never by implication. The court also rejected the surrender finding, holding that ostensible authority must be conferred by the principal and a watchman has none to accept surrender. The decree was varied by increasing the award to Shs 133,870/25, with costs on the higher scale and interest at court rates.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.What relationship existed between the appellants and the Government in relation to the twelfth floor of Electricity House?
  2. 2.Was the Government entitled to terminate that relationship?
  3. 3.If yes, was the Government required to give notice in writing to terminate it?
  4. 4.If yes, was any valid notice of termination given?
  5. 5.If not, was there nevertheless a valid termination?
  6. 6.If there was a tenancy, was there any valid surrender of it?
  7. 7.What sum, if any, was due to the appellants from the Government?

Key legal issues

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01

Whether the relationship between the parties was a tenancy at will or a monthly tenancy

Holding

It was a monthly tenancy under section 106 of the Transfer of Property Act, terminable by fifteen days' written notice, which was never given.

Reasoning

The correspondence established an agreement for a six-year lease of ascertained premises at an agreed rent; the Government took possession through the NSSF and rent was paid and accepted. In the absence of a contract to the contrary, section 106 deems such a letting to be a monthly tenancy. Courts lean against construing demises as tenancies at will; a clear intention to create one is required, which was absent here.

p. 5
02

Whether the trial judge was right that there was a valid surrender by handing keys to the appellants' watchman

Holding

No; the judge misdirected himself because the watchman had no ostensible authority to accept a surrender on the appellants' behalf.

Reasoning

A person cannot hold himself out as another's agent so as to bind that other; it is the principal who must hold the person out as having express or ostensible authority. Mr Ogot was a watchman and cleaner, never held out by the landlords as authorised to accept surrender of a tenancy, so the handing over of keys to him could not effect a surrender.

p. 3

Legal principles established

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  • Possession with the landlord's consent followed by payment and acceptance of rent results in a monthly tenancy under section 106 of the Transfer of Property Act, terminable only by written notice.
  • A tenancy at will can exist in Kenya only where expressly agreed; it cannot be implied.
  • Ostensible authority must be conferred by the principal; a person cannot confer it on himself, and a watchman lacks authority to accept surrender of a tenancy.

Court orders

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  1. 1.Appeal allowed with costs
  2. 2.Judgment and decree appealed from altered by increasing the amount awarded from Shs 3,143/05 to Shs 133,870/25
  3. 3.Costs of the increased award on the higher scale with interest at court rates

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Wrote the lead judgment holding that the relationship was a monthly tenancy under section 106 of the Transfer of Property Act, not a tenancy at will; a tenancy at will can exist in Kenya only by express agreement; the appeal was allowed and the award increased.

I am accordingly of the view that this appeal succeeds and should be allowed, with costs.p. 5
majority
majority
On appeal from
High Court of Kenya
Jurisdiction invoked
Appellate jurisdiction over an appeal from the High Court (not expressly stated in the judgment)

Relief refused

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Implied tenancy at will advanced by the respondent

A tenancy at will cannot be implied in Kenyan land law; it can only exist by express agreement

p. 5

Costs

Appeal allowed with costs; increased award to carry costs on the higher scale and interest at court rates.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

I am accordingly of the view that this appeal succeeds and should be allowed, with costs. I would alter the judgment and decree appealed from by increasing the amount awarded to the appellants from Shs 3,143/05 to Shs 133,870/25, with costs on the higher scale and interest at court rates.
p. 5Disposition and increased award
Possession by a tenant with the consent of the landlord followed by payment and acceptance of rent results, in the absence of a contract or local law or usage to the contrary, in a letting governed by the provisions of section 106 of the Transfer of Property Act.
p. 5Monthly tenancy by implication under section 106
My own view is that a tenancy at will can only exist in Kenya when it results from an express agreement to create such a tenancy, and there is no room for the implication of a tenancy at will in the land law of Kenya.
p. 5Tenancy at will must be express
To incur liability for the acts of another, it must be the principal who holds the other person out as having his authority, express or ostensible.
p. 3Ostensible authority
The word “lease” in that context does not mean a concluded or formal lease. It means a letting.
p. 4Interpretation of section 106 of the Transfer of Property Act

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "East African Power and Lighting Co Ltd v Attorney General [1978] KECA 3 (KLR)", Case Analysis (1978). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1978/3/eng@1978-11-22

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.