South C Fruit Shop Limited v Housing Finance Company of Kenya Limited [2013] KECA 330 (KLR)
The bottom line
#Kenya's Court of Appeal ruled a bank illegally evicted a tenant because it never registered its possession decree, awarding the shop Kshs 449,716.
What this practically means
#Executive summary
#Key legal issues
#Status of the appellant as a protected tenant under a controlled tenancy
The appellant was a tenant of Irene Wamae and its tenancy, being a written tenancy for a period of 2½ years (not exceeding five years), was a controlled tenancy terminable only in accordance with the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act.
The tenancy terms were contained in a letter from Tahir Malik dated 6th June 1984 for a term of 2 years 6 months, within the definition of a controlled tenancy in section 2(1) of the Act. The appellant remained in possession until its eviction in December 1985. The Act protects tenants from eviction or exploitation, so termination had to comply with section 4's prescribed notice requirements.
Effect of the unregistered decree for possession under the Mortgage (Special Provisions) Act
Section 5(3) of Cap 304 confers the right to sole possession and determines subsisting tenancies only upon registration of the decree against the title; since the decree was never registered, the respondent's rights never accrued and it could not rely on section 7 to override Cap 301.
The court interpreted section 5(3) as requiring registration before the decree holder's rights crystallise. The respondent did not contest that the decree was never registered against the title. Having failed to comply with the very statute it invoked, the respondent could not rely on the overriding-effect provision in section 7. The appellant therefore was not a trespasser and enjoyed rights capable of protection.
Duty of notice to the tenant where the decree was against the registered owner only
The decree was made against Irene Wamae, not the appellant; without registration and notice, the respondent could not enforce the decree against the tenant and, having taken over the owner's obligations, was bound to comply with the Landlord and Tenant Act before eviction.
A party taking over or inheriting a right that affects a third party must bring that relationship to the third party's attention; the law does not envisage enforcing such a right behind the back of a tenant lawfully in possession, as that would produce grave injustice. Even if the appellant were not an approved or protected tenant, appropriate notice was still required before eviction, consistent with Caledonia Supermarket.
Whether the claim was founded in tort and time-barred
The cause of action arose from the illegal eviction in breach of the tenancy agreement, i.e. breach of contract, not tort; the trial judge therefore erred in dismissing the plaint as time-barred under section 4 of the Limitation of Actions Act.
The appellant was entitled to the benefits of a protected tenant, including statutory notice. The loss and damage flowed from the failure to give that notice and the consequent unlawful termination of the tenancy, which is a breach of the contractual relationship of landlord and tenant rather than a tort, so limitation did not bar the claim.
Assessment of damages without remittal
The court declined to remit the matter for assessment and itself entered judgment for proved special damages of Kshs 385,616.00 for stock in trade and Kshs 64,100.00 for furniture and fittings, totalling Kshs 449,716.00.
Special damages must be specifically pleaded and proved. The appellant's evidence on the value of stock and furniture was not controverted in cross-examination, save that about Kshs 35,000 worth of stock was salvaged. Given the age of the case, the clarity of the evidence and the law, remittal would serve no purpose and would prejudice the appellant and the administration of justice.
Legal principles established
#- Rights of a mortgagee decree-holder under section 5(3) of the Mortgage (Special Provisions) Act, including the right to determine subsisting tenancies, crystallise only upon registration of the decree against the title; an unregistered decree does not terminate a tenancy.
- A controlled tenancy under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act can only be terminated by the notice prescribed under section 4 of that Act, notwithstanding the provisions of any other written law.
- A mortgagee taking possession must bring the taking-over of the owner's rights to the attention of a tenant in lawful possession, and in default steps into the obligations of the owner including compliance with the Landlord and Tenant Act; even an unapproved tenant is entitled to notice before eviction.
- Where a claim arises from the illegal termination and eviction of a protected tenant, the cause of action sounds in breach of contract, not tort, and is not caught by the limitation period applicable to tort claims.
Court orders
#- 1.The appeal is allowed; the order of the High Court dismissing the suit is set aside
- 2.Judgment is entered for the appellant against the respondent in the sum of Kshs 449,716.00 being loss of stock in trade, furniture, fixtures and fittings
- 3.The appellant shall have costs and interest on that amount
- 4.The appellant shall have the costs of the suit in the High Court
- On appeal from
- High Court of Kenya at Nairobi
- HCCC No. 3490 of 1989
- Jurisdiction invoked
- First appeal to the Court of Appeal under the applicable appellate statute (not expressly cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (8)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Miano & 2 others v Mbaka t/a Branden Junior School (Land Case Appeal E003 of 2025) (Environment and Land) [2026] KEELC 4019 (KLR)[2026] KEELC 4019 (KLR)2 Jul 2026applied
- Gilgil Treatment Industries Limited v Gilgil Total Investors Self Help Group & another (Environment and Land Appeal 25 of 2024) (Environment and Land) [2025] KEELC 588 (KLR)[2025] KEELC 588 (KLR)13 Feb 2025
- Omito (Trading as Ingusi Company, Formerly known as Opwoko Nanzala and Company) v Kweyu & another (Environment and Land Appeal E054 of 2021) [2024] KEELC 5371 (KLR)[2024] KEELC 5371 (KLR)22 Jul 2024
- New Chota Raha Ltd v Kenya Methodist University[2023] KEELC 16707 (KLR)29 Mar 2023
- Abdullahi Mohammud Farah & 3 others v County Government of Mandera & another [2022] KEELC 584 (KLR)[2022] KEELC 584 (KLR)25 Mar 2022
- Osano & Associates Limited v African Medical Research Foundation (AMREF)[2019] KEHC 7653 (KLR)8 May 2019applied
- Begum Kassamali Limited & Another v Highbury Properties Limited & Another[2016] KEHC 6574 (KLR)19 Feb 2016applied
- KANTHILAL RAMJI BHUNDIA T/A NIKI WEAR & 2 others v JOSEPH MWANIKI NDEGWA & 3 others[2014] KEHC 1135 (KLR)11 Dec 2014applied
Cite this brief
#Cite this brief
Caselaw, "South C Fruit Shop Limited v Housing Finance Company of Kenya Limited [2013] KECA 330 (KLR)", Case Analysis (2013). Civil Appeal 158 of 2004. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/330/eng@2013-05-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.