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Court of AppealPartially AllowedCivil Appeal No. 319 of 2010· [2017] KECA 217 (KLR)

Board of Trustees of Kenya Postal Corporation of Kenya & another v Timothy Were & 2 others [2017] KECA 217 (KLR)

Court of Appeal of Kenya
19 October 2017
EGE. M. GithinjiHOH. M. OkwenguGKG.B.M. Kariuki
1,341 words in judgment
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The bottom line

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Kenya's Court of Appeal stopped tenants from blocking a pension scheme's rent increase, ruling they were ordinary tenants with no special rights.

What this practically means

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Executive summary

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The Court of Appeal allowed the appeal against a ruling of the High Court (Muga Apondi, J.) which had granted the respondents an interlocutory injunction restraining the appellant, the Board of Trustees of the Kenya Postal Corporation of Kenya Staff Pension Scheme, from increasing rent on premises on Dennis Pritt Road, Nairobi pending the hearing of a suit. The respondents, three pensioners who sued in their own names purportedly on behalf of thirty other tenants, alleged the rent increase from Kshs.16,000 to Kshs.37,000 breached section 34 of the Retirement Benefits (Occupational Retirement Benefits Scheme) Regulations, 2000, which required renovation and valuation before increasing rent. The appellant maintained the premises were vested in it for the benefit of over 3,000 pensioners, that twenty-two of the respondents were not scheme members, and that renovation and valuation had preceded the increase. Applying the Giella v Cassman Brown principles and the Mbogo v Shah appellate-discretion framework, the Court held that the respondents' claim rested on seriously disputed facts with no discernible weighty legal issues, so no prima facie case with probability of success was established; that damages adequately compensated any overpaid rent by refund or offset; and that the balance of convenience favoured the 3,000 pensioners whose scheme received the rents. Concluding that the learned Judge did not exercise his discretion judicially, the Court set aside the ruling of 30th September 2010, dismissed the application, and awarded costs to the appellant. This decision binds lower courts on the application of the interlocutory injunction criteria in tenancy-versus-pension-scheme disputes.

Key legal issues

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01

Prima facie case with probability of success

Holding

The respondents failed to establish a prima facie case because their claim rested on seriously disputed factual issues and the learned Judge identified no 'weighty legal issues' to justify the injunction.

Reasoning

The respondents accepted that valuation was done and that the rental value exceeded the Kshs.16,000 they paid, disputing only its accuracy. Their claim, based on conditions precedent (renovation and valuation), was mainly factual and seriously contested. The Court of Appeal could not discern any weighty legal issues, so no prima facie case with probability of success was shown.

p. 3
02

Irreparable injury and adequacy of damages

Holding

No irreparable injury was shown because any overpaid rent could be refunded or offset against future rents if the suit succeeded.

Reasoning

The second Giella principle requires that the applicant would otherwise suffer injury not adequately compensable in damages. Here the rent increase was quantifiable; if the respondents prevailed at trial, the appellant would refund the difference or offset it against future rents, so damages were an adequate remedy.

p. 3
03

Balance of convenience

Holding

The learned Judge erred: the balance of convenience favoured the over 3,000 pensioners whose scheme depends on the rents, not the sitting tenants.

Reasoning

The premises are vested in the appellant as a pension scheme for the benefit of over 3,000 pensioners, and rents are paid into that scheme. The High Court had tilted the balance in favour of the sitting tenants, but the Court held the interests of the numerous pensioners outweighed those of the three respondents and other tenants.

p. 3
04

Interference with discretionary decisions on appeal

Holding

The discretion was not exercised judicially, permitting appellate interference; the Court applied Mbogo v Shah principles.

Reasoning

An injunction is an equitable remedy and its grant is a discretionary act. An appellate court interferes only where the discretion was exercised wrongly or not judicially. Because the Judge failed to identify any weighty legal issues and misjudged all three Giella criteria, his discretion was not exercised judicially and the ruling was set aside.

p. 3

Legal principles established

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  • Tenants who occupy premises under tenancy agreements do not occupy them as of right as pensioners; their relationship with a pension scheme landlord is that of landlord and tenant
  • Where a claimant's suit is grounded mainly on seriously disputed facts, no prima facie case with a probability of success is established for purposes of an interlocutory injunction
  • An appellate court may interfere with a trial court's exercise of discretion in granting an interlocutory injunction only on established principles, and where the trial judge fails to exercise that discretion judicially the injunction will be set aside
  • Where damages can adequately compensate the applicant, e.g. by refund of rent differences, irreparable injury is not shown

Court orders

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  1. 1.The appeal is allowed with costs
  2. 2.The Ruling of the High Court dated 30th September, 2010 is set aside
  3. 3.The respondents' application for an interlocutory injunction is dismissed with costs to the appellant

Authorities

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Legislation

  • Retirement Benefits (Occupational Retirement Benefits Scheme) Regulationssection 34

Cases cited (2)

  • Giella vs Cassman Brown & Co. Ltd
    [1973] EA 358
  • Mbogo vs. Shah
    [1968] EA 93
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 714 of 2009
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court under the Constitution and the Court of Appeal procedure (specific provision not stated in the judgment)

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, "Board of Trustees of Kenya Postal Corporation of Kenya & another v Timothy Were & 2 others [2017] KECA 217 (KLR)", Case Analysis (2017). Civil Appeal No. 319 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/217/eng@2017-10-19

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