Lalji Bhimji Sanghani and another v Chemilabs [1978] KECA 4 (KLR)
The bottom line
#Kenya's Court of Appeal ruled landlords are not automatically liable for basement flood damage unless they knew about the defect causing it.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the appellants were liable to the respondents in damages under the rule in Rylands v Fletcher
- 2.Whether the appellants were liable in the tort of negligence
- 3.Whether the appellants were liable for the tort of nuisance
- 4.Whether the appellants were liable in contract on an express covenant to repair in the draft lease
- 5.Whether the appellants were liable in contract on an implied warranty that the premises were fit for the storage of goods
- 6.Whether the judge wrongly exercised his discretion in awarding costs on the dismissed counterclaim
Key legal issues
#Whether the unexecuted draft lease was incorporated into the agreement so as to create an express covenant to repair
No express covenant to repair was breached: the chamber was not within the demised premises nor 'situate on the said premises', and in any event the appellants had no notice of any want of repair before the August flood.
Although the trial judge found the contract was set out in the draft lease and correspondence, and an unregistered lease can operate inter partes and be specifically enforceable, a covenant to repair by a lessor is a covenant on notice. The chamber worked for nine months; the July 1972 stoppage was cleared by a competent plumber who thought no repair was needed, and neither he nor the respondents told the appellants repairs were necessary. Only after the August flood, through Mr Fitzgerald, was any inherent defect suggested - and that flood caused the damage. Absent notice before the flood, there could be no breach.
Whether an implied warranty that the premises were fit for the storage of pharmaceutical goods arose
No implied warranty arises on the sale or lease of a building for the commercial purpose of storing goods; the implied warranty of reasonable fitness is confined to dwelling-houses (whether complete or not).
The court held the building was structurally complete on 30 July 1971, and no implied warranty attaches to the sale of a complete house. Even if it had been under construction, the authorities (Smith v Marrable, Miller v Cannon Hill Estates, Perry v Sharon, Hancock, Jennings v Tavener) all concern dwelling-houses and fitness for human habitation. Lord Coleridge CJ in Manchester Bonded Warehouse had expressly declined to extend the warranty to ordinary leases of lands, houses or warehouses. The social policy protecting home purchasers does not apply to hard-headed businessmen negotiating for storage space.
Whether the appellants were strictly liable under Rylands v Fletcher for the escape of sewage
Not liable: the inspection chamber was part of a drainage system - a normal and usual user of land - installed by a competent independent contractor for the common benefit of all, and the appellants neither knew nor had the means of knowing that sewage was accumulating.
Absolute liability under Rylands v Fletcher requires that the defendant brought and accumulated on his land the dangerous matter in circumstances involving knowledge and volition and constituting an unnatural or extraordinary user. Drainage of water and sewage is an ordinary and natural user (Ross v Fedden; Rickards v Lothian; Blake v Woolf). Although the chamber became in a sense a reservoir of sewage by August 1972, whether from defective construction or blockage, the appellants had no knowledge of the accumulation until after the escape. Jones v Llanrwst was distinguishable because there the defendants actually collected the sewage.
Whether the appellants were negligent in constructing or maintaining the inspection chamber
Not negligent: they had no notice of any inherent defect until after the August flood, and any negligence of the independent contractor plumber was not their responsibility.
Negligence in failing to remedy a defect presupposes knowledge of it; the chamber was inspected and approved by the local authority and the appellants only learned of the inherent defects after Mr Fitzgerald's inspection following the August flood. Mr VV Patel was a competent independent contractor, and on the authority of Blake v Woolf a person is not liable for the negligence of an independent contractor in these circumstances. The ground of appeal on negligence therefore succeeded.
Whether the appellants were liable in nuisance
Not liable: the chamber constituted a nuisance immediately before the August flood, but the appellants neither caused nor continued it because they had no knowledge of the defect or offensive operation until after the event.
Following Lord Atkin's definition in Sedleigh-Denfield v O'Callaghan, liability in nuisance requires some degree of personal responsibility. The trial judge's finding that the appellants 'knew what this faulty chamber would probably lead to' was wrong: the defects were not discovered until after the August flood, and the chamber had been inspected and approved by the local authority. A person can only be said to continue a nuisance if he knows it is operating offensively, is able to prevent it, and omits to prevent it; the appellants did not know, so were not able, and did not omit.
Whether the judge wrongly awarded costs on the dismissed counterclaim
The ground failed: the judge's discretion on costs under section 27 of the Civil Procedure Code was properly exercised.
Section 27 provides that costs follow the event unless the judge for good reason otherwise orders. Nesbitt v Meyer was distinguished as laying down no principle of general application and being factually different: here the appellants gave no indication until the very last stages that they would not pursue the counterclaim, whereas in Nesbitt's case it was common ground that specific performance could still be ordered after expiry of the term. The respondents had to be prepared to defend the counterclaim, so the award of costs on its dismissal was justified.
Legal principles established
#- A first appeal court is not necessarily bound by the findings of fact in the court below but will not usually depart from them unless the trial judge failed to take account of particular circumstances or probabilities, or his impression of a witness's demeanour is inconsistent with the evidence generally.
- A lessor's covenant to repair must be construed as a covenant to repair on notice; there is no breach until the lessor has notice of want of repair.
- No implied warranty of reasonable fitness arises on the sale or lease of a building for the commercial purpose of storing goods; the warranty of fitness is confined to dwelling-houses.
- Strict liability under Rylands v Fletcher requires an unnatural or extraordinary user of land and a conscious, knowing accumulation of the dangerous matter; a drainage system installed by a competent independent contractor for the common benefit of all is a natural user, and liability for escape of sewage does not attach in the absence of negligence or knowledge.
- A person can only be said to 'continue' a nuisance if he knows it is operating offensively, is able to prevent it, and omits to prevent it; liability in nuisance requires some degree of personal responsibility.
- A person is not liable for the negligence of a competent independent contractor in this context.
Court orders
#- 1.Appeal allowed on all grounds relating to liability
- 2.Judgment and decree of the High Court set aside and a judgment and decree substituted dismissing the suit, with costs
- 3.Counterclaim dismissed, with costs
- 4.Certificate for two counsel in each case
- 5.Appellants to have the costs of the appeal, with a certificate for two counsel
- 6.No directions from the Court on the expense of preparing photostat copies of authorities, a matter for the taxing officer
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Delivered the principal judgment. Held the appeal succeeded on all grounds as to liability: no binding express covenant to repair (no notice of want of repair; chamber not within the demised premises), no implied warranty of fitness for commercial storage premises, no strict liability under Rylands v Fletcher (drainage was a natural user; landlord lacked knowledge of the accumulation), no negligence (no notice of inherent defect; liability for an independent contractor not established on these facts), and no liability in nuisance (the appellants neither caused nor continued the nuisance since they had no knowledge of the defect before the August flood). Would have dismissed the ground attacking costs on the counterclaim.
I would accordingly allow this appeal on all grounds relating to liability.p. 8
Wrote the judgment
Agreed the appeal must succeed in both contract and tort. Considered there was no evidence that the advocates had authority as agents to bind the parties to the draft lease terms, so no express covenant to repair could be relied on; declined to extend the implied warranty of fitness from dwelling-houses to commercial buildings; expressed private doubt about the trial judge's finding of fact on causation; concurred in the orders proposed by Law JA.
I would therefore not go so far as to say, as Kneller J did, that the agreement is set out in the draft lease and in the correspondence.p. 9
Wrote the judgment
Agreed with the judgment of Law JA in every respect, but recorded doubt that the defects in the inspection chamber were the proximate cause of the flood, noting the hard object blocking the city council's outlet pipe might have been the true cause; observed the parties had paid little regard to proximate cause. Agreed the appeal succeeds as to liability and in the orders proposed.
It is possible, and it seems to be the only logical conclusion, that this obstruction in the city council’s sewage system was the proximate cause of the floodp. 11
- On appeal from
- High Court
- Jurisdiction invoked
- First appeal to the Court of Appeal (appellate jurisdiction over a High Court decision)
Relief refused
#Costs ground of appeal challenging the award of costs on the dismissed counterclaim
The judge had a full discretion on costs; no indication of non-pursuit of the counterclaim was given until the last stages, and the respondents had to be prepared to defend it
Respondents' suggestion (unsupported by cross-appeal) that interest should run from the date of the original plaint
There was no cross-appeal, so the point could not be argued
Appellants' request for directions on the expense of preparing photostat copies of authorities
A matter primarily for the taxing officer; no directions necessary or desirable
Costs
Judgment and decree below set aside and substituted with a judgment and decree dismissing the suit, with costs; counterclaim dismissed with costs; certificate for two counsel in each case; appellants to have the costs of the appeal, with a certificate for two counsel.
Quotable passages
#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 would accordingly allow this appeal on all grounds relating to liability. I would set aside the judgment and decree appealed from, and substitute a judgment and decree dismissing the suit, with costs, and dismissing the counterclaim, with costs, with a certificate for two counsel in each case. The appellants should have the costs of this appeal, with a certificate for two counsel.
Appeal as to liability allowed.
This Court on a first appeal is not necessarily bound by the findings of fact in the court below, but it will not usually depart from them unless it appears that the trial judge failed to take account of particular circumstances or probabilities, or if his impression of the demeanour of a witness is inconsistent with the evidence generally
a covenant by a lessor to repair must be construed as a covenant to repair on notice, and there can be no breach of such a covenant until the lessor has notice of want of repair
I can find no authority for holding that, in the case of the purchase or leasing of a building for the purpose of storing goods, an implied warranty exists that the premises are fit for that purpose.
The appellants did not, by any conscious act of volition, bring about that accumulation. They were not liable in the absence of negligence for the consequences of the escape of the sewage.
A person can only be said to “continue” a nuisance, in Lord Atkins’ word, “if he knows that it is operating offensively, is able to prevent it, and omits to prevent it.”
Issues in the judgment
#The judgment gives inconsistent dates for the first flooding incident: the narrative states the first flooding occurred on 20th July 1972 and the serious damaging flood on 23rd August 1972, but Wambuzi JA's concurring opinion refers to 'in July 1971, August 1971 and January 1976' for the three blockages and to 'the flooding of the basement in August 1971'.
The report is headed as delivered by Law JA in the main body but the certification block and signature listing place SIR JAMES WICKS, CHIEF JUSTICE first, with no express designation of the authoring judge in the closing block; the authorship of the main judgment rests on the internal heading 'Law JA'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lalji Bhimji Sanghani and another v Chemilabs [1978] KECA 4 (KLR)", Case Analysis (1978). . Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1978/4/eng@1978-11-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.