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Court of AppealDismissedSecond appeal from HCCA No. 60 of 2018 (originating in HCCC No. 27 of 2011, transferred to CMCC No. 380 of 2014)· [2024] KECA 1161 (KLR)

Diamond Homes Limited v Shapi (Civil Appeal 118 of 2021) [2024] KECA 1161 (KLR)

Court of Appeal of Kenya
20 September 2024
SKS. Gatembu KairuKLDr. K. I. LaibutaGOG. V. Odunga
3,334 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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The Court of Appeal confirmed that a company that signs a lease through its director cannot later deny owning the building when it collapses.

What this practically means

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Executive summary

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The respondent sued the appellant over the collapse of Hajjra Towers in 2011, claiming she had leased offices G12 and G13 under a letter of offer dated 21st February 2011 executed on the appellant's letterhead by its director, Fuad, and had spent Kshs. 803,220/- on modifications. The trial magistrate (Hon. F. Kyambia, SPM) entered judgment for her, holding liability in negligence proved on a balance of probabilities and special damages specifically proved. The High Court (W. A. Okwany, J) dismissed the appellant's first appeal, finding the letter of offer created a valid contractual relationship and that the appellant, as lessor/owner, could not shift liability having never instituted contemplated third-party proceedings. On second appeal, the Court of Appeal confined itself to points of law under Section 72(1) of the Civil Procedure Act. It held that the appellant's denial of ownership was a mere afterthought given the documentary evidence and its failure to disclaim ownership or join the alleged true owner. On the second issue, the Court held the respondent's election to sue in negligence was her choice; the appellant, having never pleaded that the claim should have been brought under the Occupiers' Liability Act (Cap. 34), was bound by its pleadings and could not spring the point in submissions. The appeal was dismissed with costs to the respondent and the High Court's judgment and decree of 9th September 2020 upheld.

Key legal issues

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01

Liability of the lessor for collapse of leased premises

Holding

The appellant, having executed the letter of offer as lessor through its director and having failed to adduce evidence disclaiming ownership or join the alleged true owner as third party, was properly found liable in negligence

Reasoning

The draft lease described the appellant as lessor; the letter of offer was on its letterhead and signed by its director; the respondent took possession with its consent. These outward acts constituted a contract and established the appellant as lessor/owner. Its denial of ownership was a mere afterthought; no third-party proceedings were taken and no evidence disclaiming ownership was adduced, so the finding on liability could not be faulted.

p. 6
02

Choice between tort of negligence and Occupiers' Liability Act claim

Holding

It was the respondent's choice to sue in negligence; the appellant, having failed to plead the Cap. 34 point in its defence, could not raise it on appeal

Reasoning

The reference to the Occupiers' Liability Act was crossed out of the amended plaint, showing the respondent elected to sue in negligence and led evidence to the required standard. The appellant never pleaded the point in its defence; parties are bound by their pleadings and cannot spring surprises in submissions. Whether to found the claim on Cap. 34 was not the appellant's matter to determine.

p. 6

Legal principles established

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  • A second appeal to the Court of Appeal is confined to matters of law only
  • A company cannot escape obligations under an agreement executed by its director on its behalf; the parties' intention is discerned from documents and outward conduct
  • Parties are bound by their pleadings and evidence at variance with pleadings must be disregarded
  • A party who does not plead a particular cause-of-action objection may not raise it for the first time in submissions

Court orders

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  1. 1.Appeal dismissed with costs to the respondent
  2. 2.Judgment and Decree of the High Court of Kenya at Mombasa (W. A. Okwany, J) delivered on 9th September 2020 upheld
On appeal from
High Court of Kenya at Mombasa
HCCA No. 60 of 2018
Jurisdiction invoked
Section 72(1) of the Civil Procedure Act (second appeal lying on matters of law)

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, "Diamond Homes Limited v Shapi (Civil Appeal 118 of 2021) [2024] KECA 1161 (KLR)", Case Analysis (2024). Second appeal from HCCA No. 60 of 2018 (originating in HCCC No. 27 of 2011, transferred to CMCC No. 380 of 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1161/eng@2024-09-20

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