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ELCPartially AllowedELC Case No. 4 of 2018 (Chuka); formerly Meru ELC Court No. 63 of 2004· [2018] KEELC 512 (KLR)

Isaiya Mugambi M’muketha v Attorney General & 2 others ; John Muchai Mugambi (Interested Party) [2018] KEELC 512 (KLR)

Environment and Land Court
3 December 2018
3,921 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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A Kenyan court ordered Meru's county government to pay a landowner over Kshs.115 million for demolishing his hotel, including Kshs.109 million for lost income.

What this practically means

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Executive summary

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This is a remitted assessment of damages following the Court of Appeal's judgment of 29th December 2017 in Civil Appeal No. 80 of 2016. The plaintiff, registered owner of MERU MUNICIPALITY BLOCK 1/230 and 1/231, had obtained judgment against the defendants for demolition of a hotel under construction and conversion of the plots into a green park. The ELC at Meru (P. M. Njoroge J) awarded Kshs.2,850,000/= for destroyed buildings, Kshs.63,100,000/= for loss of user over the unexpired 89-year lease, Kshs.1,000,000/= general damages and Kshs.2,000,000/= exemplary damages. The Court of Appeal upheld liability and all awards except loss of user, finding insufficient evidence, and directed the trial judge to take further evidence and assess reasonable damages. Before the ELC at Chuka, the plaintiff called a licensed valuer (PW1) whose report assessed loss of user at Kshs.109,585,488.65/=, and a neighbouring tenant (PW2) giving indicative rentals. The 3rd defendant called no evidence and filed no contrary valuation. The court held that the Court of Appeal's directions expressly required additional evidence, that liability was settled and could not be reopened, and that loss of user is assessed on the property's value, developments and the proved intended income-earning activity. Finding the valuation credible and unimpeached, judgment was entered for the plaintiff against the County Government of Meru for Kshs.109,585,488.65/= loss of user, together with the previously upheld awards of Kshs.2,850,000/=, Kshs.1,000,000/= and Kshs.2,000,000/=, with interest at court rates on all sums.

Key legal issues

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01

Whether the court could admit fresh valuation evidence on remission

Holding

The Court of Appeal's directions expressly called for additional and further evidence, so the fresh valuation report and witnesses were properly received.

Reasoning

The Court of Appeal had found insufficient material before the trial judge and directed that further evidence be taken on item No. 2 (loss of user). The 3rd defendant's submission that fresh evidence was not anticipated was groundless, as the very wording of the directions required the court to gather evidence in addition to what was on record, and the court was free to raise or lower its award.

p. 4
02

Assessment of reasonable damages for loss of user

Holding

The valuation report by Afriland Valuers Limited, supported by evidence of indicative rentals and the property's town-centre location, established a reasonable basis for awarding Kshs.109,585,488.65/= for the unexpired lease term.

Reasoning

The plaintiff's expert was a licensed valuer with a valid practising certificate who considered location, market for similar properties, nature of user, economic trends, expected income for the unexpired lease, occupancy rates and development phasing. The evidence was credible and unimpeached in cross-examination, and the 3rd defendant called no contrary expert evidence.

p. 5
03

Whether compulsory acquisition principles applied

Holding

Although the events amounted to a constructive compulsory acquisition, the claim before the court was specifically for loss of user; the compulsory acquisition issue was closed.

Reasoning

The court held the two concepts are related but distinct: compensation for compulsory acquisition is based on present value and improvements, while loss of user is based on the intended income-earning activity. The plaintiff's claim was specific to loss of user, and the Court of Appeal had confined the proceedings to that issue.

p. 4
04

Whether liability could be reopened

Holding

Liability against the 3rd defendant had been conclusively settled by the Court of Appeal and could not be reopened on remission.

Reasoning

The 3rd defendant's submissions sought to reopen matters settled by the Court of Appeal, including liability and the propriety of fresh evidence. The court rejected that attempt, noting only loss of use was open for determination and that the defendant's failure to call any expert witness undermined its challenge to the valuation.

p. 5

Legal principles established

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  • Loss of user damages are assessed on the value of the property, developments on the land, and the intended income-earning activity of the proprietor, which intention must be proved to the satisfaction of the court.
  • Where the Court of Appeal directs that further evidence be taken to assess damages, the trial court is entitled and required to receive additional evidence and may vary its award upwards or downwards.
  • Liability, once settled by the Court of Appeal, cannot be reopened before the trial court on remission.

Court orders

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  1. 1.Judgment entered for the plaintiff against the 3rd defendant, the County Government of Meru
  2. 2.Kshs.2,850,000/= being the value for destroyed construction and materials
  3. 3.Kshs.1,000,000/= as general damages
  4. 4.Kshs.2,000,000/= as exemplary and aggravated damages
  5. 5.Kshs.109,585,488.65/= for the unexpired term of the plaintiff's leases
  6. 6.Interest on (a), (b), (c) and (d) at court rates - for (a) to (c) from 27th April 2016 and for (d) from the date of this judgment

Authorities

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Legislation

  • Court of Appeal RulesRule 29(1)(a); Rule 31
  • Land ActSec III (prompt payment after compulsory acquisition)
  • Land Acquisition Act (re repealed)Schedule

Cases cited (5)

  • Selle vs. Associated Motor Boat Co.
    [1968] EA 123
  • Limo versus Commissioner of Lands
    Civil Appeal No. 6 of 1987; KLR (E&L) 175
  • Five Star Agencies Ltd versus National Land Commission
    Nairobi ELC case No. 445 of 2014
  • John Kariuki Macharia versus Commissioner for Lands
    Nairobi ELC 25/2013
  • Kanini Farm Ltd v Commissioner of Lands
    (1986) KLR 310
On appeal from
Court of Appeal (Nyeri)
Civil Appeal No. 80 of 2016
Jurisdiction invoked
Remitted proceedings pursuant to Rule 31 of the Court of Appeal Rules (further evidence on damages for loss of user)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Isaiya Mugambi M’muketha v Attorney General & 2 others ; John Muchai Mugambi (Interested Party) [2018] KEELC 512 (KLR)", Case Analysis (2018). ELC Case No. 4 of 2018 (Chuka); formerly Meru ELC Court No. 63 of 2004. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/512/eng@2018-12-03

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