MNAZI MOJA ESTATES LIMITED v AMBALAL PURSHOTTAM MISTRY AND FIVE OTHERS [1986] KECA 70 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that silence is not refusal: a landlord who fails to respond to a consent request has not legally refused consent to a lease assignment.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether on the material before the High Court it was shown that the landlord unreasonably withheld consent to the proposed assignment of the sub-lease to Mr & Mrs Pereira
- 2.Whether a desire by the landlord/reversioner to purchase the lease himself can, as a matter of law, never constitute a valid reason for refusing consent
- 3.Whether an originating summons under Order XXXVI of the Civil Procedure Rules was the appropriate procedure for seeking a declaration that consent had been unreasonably refused
- 4.Whether the High Court's rushed handling of the matter, including the late filing of the appellant's affidavit, occasioned a failure of justice
Key legal issues
#Whether the landlord unreasonably withheld consent to the assignment
The appeal succeeded: on the affidavits it was disputed that any refusal of consent was ever communicated, and the only reason given (the landlord's wish to buy the property) emerged for the first time at the hearing; the High Court erred in holding that consent had been unreasonably refused.
The lessees wrote on October 7, 1985 seeking consent; the landlord's reply merely indicated the matter would be referred to a director then abroad. Affidavits alleged an oral refusal by an unnamed director, which was challenged. Platt Ag JA held there was no clear refusal before the application and that what was described was a counter-offer to buy at the same price. On this material the judge's finding of unreasonable refusal could not stand.
Whether a reversioner's desire to purchase the lease can never be a valid reason for refusing consent
The English authorities (Bates v Donaldson; Re Winfrey & Chatterton's Agreement) turned on a prior offer by the reversioner designed to coerce the tenant into selling; no such prior offer existed here, and the court declined to hold that such a desire can never be a valid reason.
Hancox JA distinguished the cited English cases on their facts because in each a prior offer had been made to buy the lease, exposing an object of coercing the lessee. Here there was no prior offer, so the ratio of those cases did not apply. The court expressly declined to lay down an absolute rule that a desire to purchase the reversion is always invalid.
Whether the originating summons procedure was competent for a declaration of unreasonable refusal of consent
Platt Ag JA held that Order XXXVI of the Civil Procedure Rules makes no provision for a declaration that consent was unreasonably refused, the originating summons was wrongly grounded under a non-existent section 97 of the Civil Procedure Act, and the proceedings were incompetent; such matters must be commenced by a suit (plaint).
The summons was brought under Order XXXVI rule 3A and 'section 97' of the Civil Procedure Act; rule 3A applies to mortgage disputes and section 97 no longer exists, having been replaced by section 3A on inherent jurisdiction. None of the Order XXXVI rules covers a declaration of unreasonable refusal of consent. Gachuhi Ag JA added that Order 54A of the English procedure, relied on analogically, was revoked in 1962.
Whether the rushed High Court proceedings caused a failure of justice
Yes: the appellant was compelled to file its affidavit in the morning with the matter decided the same afternoon on affidavit evidence, without directions for the trial of contentious factual issues, denying it a proper hearing.
Gachuhi Ag JA emphasised that the court aims at expeditious disposal but that haste may cause injustice where all facts are not before it. The trial judge received the appellant's reason for refusing consent for the first time during the hearing; counsel's statements did not tally with his client's affidavit. Directions under Order XXXVI should have been given, potentially converting the summons into a suit under rule 10.
Legal principles established
#- A landlord may only rely on reasons for refusing consent to an assignment which actually influenced his mind at the date of the refusal; reasons first advanced at the hearing cannot be relied upon.
- A mere request for consent to assign, followed by no reply from the lessor, does not amount to a refusal of consent; the lessor must be given a reasonable time to consider the request.
- The originating summons procedure under Order XXXVI of the Civil Procedure Rules is inappropriate where the issues raise complex and contentious questions of fact requiring oral evidence.
- It has not been settled that a landlord's desire to purchase the reversion can never, as a matter of law, constitute a valid reason for refusing consent to an assignment.
- Where a question of jurisdiction is concerned, the Court of Appeal must take it up whether or not the point was raised in the courts below.
Court orders
#- 1.Appeal allowed
- 2.Order and decree of the High Court set aside (Hancox JA: proceedings remitted to the High Court to hear and determine the case on oral evidence; Platt Ag JA: proceedings struck out as incompetent and a suit directed to be brought; Gachuhi Ag JA: plaintiff may start the matter afresh)
- 3.Costs of the appeal awarded to the appellant
- 4.Each party to bear their own costs of the High Court proceedings
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Allowed the appeal, holding that on the affidavits it was not shown the landlords unreasonably refused consent; he differed from Aragon J, set aside the order and decree and remitted the proceedings to the High Court for oral evidence, with costs of the appeal to the appellant and each party bearing its own costs in the High Court.
I would therefore allow the appeal and set aside the order and decree of the High Court. I would make an order remitting the proceedings to the High Court to hear and determine the case according to the evidencep. 3
Wrote the judgment
Allowed the appeal on the wider ground that the originating summons procedure under Order XXXVI was not competent for a declaration of unreasonable refusal of consent; he would set aside the judgment and strike out the proceedings as incompetent, with a suit to be brought, and also found no clear refusal of consent on the record.
I would set aside the judgment and orders of the High Court and strike out the proceedings as incompetent. I would grant the costs of the appeal to the appellant.p. 5
Wrote the judgment
Agreed the appeal should be allowed: the request for consent was insufficient and failure to reply cannot amount to refusal; the rush to court on affidavit evidence without proper directions denied the appellant a proper hearing; the High Court order should be set aside and the plaintiff could start afresh.
Just a mere letter to the Mombasa office which was not followed by a reminder while the main office is in Nairobi cannot be a sufficient request and failure to reply cannot be sufficiently stated to be a refusal to grant the consent.p. 6
- On appeal from
- High Court of Kenya at Mombasa
- Civil Case No 867 (O S) of 1985
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal over a decision of the High Court (first appeal against an adjournment order on costs and ruling); no specific constitutional provision invoked in the judgment.
Relief refused
#Confirmation that the assignment of the lease to Mr & Mrs Pereira and the associated bank charge should proceed as if consent had been given
The court found it was not established that consent had been refused, let alone unreasonably refused; the question whether the mortgage/charge required consent was academic and not properly on the record
Costs
Costs of the appeal to the appellant; each party to bear their own costs of the High Court proceedings.
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 therefore allow the appeal and set aside the order and decree of the High Court. I would make an order remitting the proceedings to the High Court to hear and determine the case according to the evidence, which in my opinion should be oral evidence, brought before it. I would award the costs of the appeal to the appellant. I agree that each party should bear their own costs of the High Court proceedings.
I would set aside the judgment and orders of the High Court and strike out the proceedings as incompetent. I would grant the costs of the appeal to the appellant. But in so far as the appellant did not take all the points in the High Court which he should have done, each party will bear his own costs in the High Court.
I would also allow the appeal with costs and set aside the order of the High Court. I would also agree with the proposed order regarding costs in the High Court. The plaintiff can start the matter afresh.
a landlord can only be permitted to rely on reasons which actually influenced his mind at the relevant date, namely the refusal of the consent.
this procedure is inappropriate when the issues raise complex and contentious question of fact
Where a question of jurisdiction is concerned, this court must take it up, whether or not the point was raised below.
The tenant is bound to ask for the consent before he assigns, even though it could not properly be refused , and to give the landlord a reasonable time in which to consider the matter.
Issues in the judgment
#The three judges diverge on the disposition below: Hancox JA remits the proceedings for oral evidence while Platt Ag JA strikes them out as incompetent, and the judgment does not record a single composite order reconciling the two.
The names of the parties and the indenture date are inconsistently stated across the judgment ('Mnazi Moja Estateds' in two headings; the lease is dated September 25, 1956 in Hancox JA's judgment but April 25, 1956 in Platt Ag JA's judgment).
The judgment headnote/miscarriages of typography: the respondent is spelled 'RESPODENT' and the appellant's name appears as 'Mnazi Moja Estateds Limited' in two of the three cause titles.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "MNAZI MOJA ESTATES LIMITED v AMBALAL PURSHOTTAM MISTRY AND FIVE OTHERS [1986] KECA 70 (KLR)", Case Analysis (1986). Civil Appeal No 47 of 1986. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1986/70/eng@1986-07-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.