Kileleshwa Service Station Ltd v Kenya Shell Ltd
The bottom line
#Kenya's Court of Appeal ruled a 90-day notice was too short to end a 30-year service station relationship, and you cannot appeal and review the same judgment at once.
What this practically means
#Executive summary
#Key legal issues
#Reasonableness of the termination notice for an oral contractual licence
The 90-day notice was grossly inadequate; in the absence of an agreed notice period the court may determine what reasonable notice is, based on the circumstances, including the length of the relationship (over 30 years).
The relationship rested on an oral agreement whose full terms were not disclosed; the standard operator's licence with a 90-day notice clause did not govern Kileleshwa, which never executed it. General principles governing a contractual licence therefore applied, with no fixed termination period. Equity required notice proportionate to the length of the relationship. However, given the passage of over six years and the broken relationship, requiring a fresh notice would itself be inequitable; instead Kileleshwa was granted six months to vacate.
Jurisdiction to review a decision after a notice of appeal has been filed
Review was improperly granted. Once Shell filed and served a notice of appeal and lodged a record of appeal, the High Court had no jurisdiction to review the same judgment, and the grounds for review were in any event the same as the grounds of appeal.
Order 44 rule 1(i) permits review only of a decree or order from which no appeal has been preferred. Shell had preferred an appeal specifically attacking the Kshs.13,088,000/= award, creating concurrent proceedings that the policy of the law seeks to obviate. Lesiit J. thus sat in effect on appeal over a decision of a court of the same jurisdiction, which was improper. The alleged error was not one apparent on the face of the record because the equipment issue had been canvassed, evidence taken on it, and a court may determine an issue left to it.
Determination of issues outside the agreed issues
The reasonableness of the notice period, though not listed among the three agreed issues, was properly before Ochieng J. because both parties addressed it at trial without objection.
By agreeing on issues parties bind themselves to the course of trial, but when an issue outside the agreed issues is discussed and evidence called on it without objection, it is taken as a variation of the agreed issues. Shell's own counsel conceded at final submissions that the length of notice was in issue. Order 20 rules 4 and 5 of the Civil Procedure Rules apply with modification in such circumstances.
Proof of the value of improvements and equipment
The award of Kshs.13,088,000/= was unsupportable because the value was given as an unitemised block figure without proof; the order was set aside pending an independent valuation.
Ochieng J. considered it unreasonable to require Kileleshwa to remove its equipment but never assessed whether the quoted value was reasonable. Some improvements were immovable, some uses spent, and some equipment depreciated, so awarding original value was unjust. A court-appointed independent valuer, mutually acceptable to the parties, was to establish worth within fourteen days, and the judgment varied accordingly.
Legal principles established
#- Where an issue not among the agreed issues is canvassed at trial without objection, it is treated as if the parties had varied the agreed issues to include it, and the court has jurisdiction to determine it.
- Once a party has filed a notice of appeal, the High Court lacks jurisdiction to entertain a review of the same decision; a party cannot pursue appeal and review concurrently, and a judge cannot sit on appeal over a decision of a court of concurrent jurisdiction.
- The reasonable period of notice for terminating a contractual licence not governed by an agreed notice term is determinable on the circumstances of each case.
- Judgment for a liquidated sum claimed as the cost of improvements and equipment requires proof of the cost; a block, unitemised figure cannot found an award.
Court orders
#- 1.Civil Appeal No. 205 of 2008 (Kileleshwa's appeal against the review ruling) allowed
- 2.Civil Appeal No. 239 of 2008 (Shell's appeal) partially allowed
- 3.Kileleshwa given six months from the date of the judgment to clear from the suit premises and deliver vacant possession to Shell
- 4.The order awarding Kshs.13,088,000/= for equipment set aside, with the parties to procure a valuation by an independent valuer or assessor mutually acceptable and appointed by the High Court, whose report is to be filed within fourteen days of appointment; Ochieng J.'s judgment to be varied to reflect the valuation figure
- 5.The order directing Shell to pay the equivalent of six months' profits in lieu of notice set aside
- 6.Parties to continue their relationship as before for the six-month period to facilitate a smooth and amicable handover of the station
- 7.Kileleshwa awarded the costs of its appeal (Civil Appeal No. 205 of 2008); no order as to the costs of Civil Appeal No. 239 of 2008
- On appeal from
- High Court of Kenya at Milimani Commercial Courts, Nairobi
- H.C.C.C. No. 594 of 2004 (and review ruling arising from H.C.C.C. No. 462 of 2000)
- Jurisdiction invoked
- The Court of Appeal's appellate jurisdiction over the High Court judgment and the review ruling; no specific constitutional or statutory provision is invoked in the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kileleshwa Service Station Ltd v Kenya Shell Ltd", Case Analysis (2012). Civil Appeal No. 205 & 239 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2012/13/eng@2012-04-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.