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ELCPartially AllowedNot stated in the judgment text provided· [2022] KEELC 2564 (KLR)

CBA Property Holdings Limited v Ahmednsasir Maalim Abdullahi & another (Environment & Land Case E277 of 2020) [2022] KEELC 2564 (KLR)

Environment and Land Court
12 July 2022
MMM.D. Mwangi
2,936 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan landlord who sued for full rent on a broken lease won only one year's rent because they didn't try to find a new tenant.

What this practically means

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Executive summary

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The Plaintiff landlord sued the Defendant tenant, a law firm, over a six-year lease of office space on the 2nd floor of the CBA building on L.R. 209/935, Nairobi, dated 26th September 2019 with effect from 1st July 2019. The Defendant gave notice on 31st August 2020 of its intention to terminate the tenancy and vacate on 31st December 2020. The Plaintiff sued for a permanent injunction, specific performance and special damages being rent for the unexpired term to 30th June 2025, but at hearing dropped the injunction and specific performance prayers, leaving a claim for special damages of Kshs. 29,597,491.80. Each party called one witness; both agreed the lease contained no termination clause. The court framed two issues: whether the Defendant breached the lease, and whether damages were payable for the entire lease term. Holding the lease to be a fixed-term and not a periodic tenancy, the court followed Chimanlal Meghji Naya Shah and Ranji Meghi Gudka to find that mid-term termination without a termination clause was a breach, and that the three months' notice was of no legal consequence, the Land Act, 2012 notice regime applying only to periodic tenancies. On damages, however, the court applied the duty to mitigate (Hadley v Baxendale; British Westinghouse; Consolata Anyango Auma; African Highland Produce; Caltex Oil; Keneric Tractor), noting the premises remained unoccupied and no mitigation steps were shown. Awarding the entire term's rent would be unconscionable; the court granted 12 months' rent for 2021 (Kshs. 5,735,733/=), less a Kshs. 3,000,000 deposit, yielding Kshs. 2,735,733/- with interest at court rates from filing, plus costs of the suit. Judgment delivered at Nairobi on 12th July 2022 by M.D. Mwangi J.

Key legal issues

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01

Whether the Defendant breached the fixed-term lease by issuing a three months' termination notice where the lease contained no termination clause

Holding

Yes - the lease was a fixed-term, not periodic, lease; the notice was of no legal consequence and the Defendant breached the lease.

Reasoning

Both parties' witnesses agreed the lease contained no termination clause. The court adopted the reasoning in Chimanlal Meghji Naya Shah and Ranji Meghi Gudka that terminating a fixed-term lease before expiry is a breach. The Defendant's reliance on notice applies only to periodic tenancies under section 57(4) of the Land Act, 2012, which was inapplicable here. The court therefore found breach.

p. 4
02

Whether damages payable equal rent for the entire unexpired lease term

Holding

No - damages are subject to mitigation; the Plaintiff was awarded only 12 months' rent for 2021, less the deposit held.

Reasoning

Applying Hadley v Baxendale, British Westinghouse, Consolata Anyango Auma, African Highland Produce and Caltex Oil, the court held the Plaintiff had a duty to mitigate and show steps taken to re-let. The premises remained unoccupied and no mitigation steps were shown. Despite COVID-19, a new tenant should have been secured within one year, so rent for 2021 only was fair, reasonable and adequate compensation.

p. 6

Legal principles established

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  • Termination of a fixed-term lease without a termination clause, before expiry, constitutes a breach of contract; notice provisions for periodic tenancies under section 57(4) of the Land Act, 2012 do not apply to fixed-term leases.
  • Damages for wrongful termination of a lease are subject to the duty to mitigate loss and are not automatically the rent for the entire unexpired term.

Court orders

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  1. 1.Award of Kshs. 5,735,733/= representing 12 months' rent for the year 2021, less the deposit of Kshs. 3,000,000 held by the landlord, yielding a net award of Kshs. 2,735,733/-
  2. 2.Interest on the net award at court rates from the date of filing suit
  3. 3.Costs of the suit awarded to the Plaintiff

Authorities

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Legislation

  • Land ActSection 57(4)

Cases cited (8)

  • Chimanlal Meghji Naya Shah & Another –vs- Oxford University Press (E.A) Ltd
    (2007) eKLR
  • Ranji Meghi Gudka Ltd –vs- Kisii University
    (2019) eKLR
  • Consolata Anyango Auma –vs- South Nyanza Sugar Company Ltd
    (2015) eKLR
  • Hadley –vs- Baxendale
    (1854) 9 Exh 341
  • British Westinghouse Electric and Manufacturing Company –vs- Underground Electric/Railways Company of London Ltd
    (1912) AC 677
  • African Highland Produce Ltd –vs- John Kisorio
    (2001) eKLR
  • Caltex Oil (Kenya) Ltd –vs- Evanson Njiiri Wanjihia
    (2017) eKLR
  • Keneric Tractor Sales Ltd. v. Langille
    (1987), 43 D.L.R. (4th) 171
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over the lease dispute (specific enabling 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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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, "CBA Property Holdings Limited v Ahmednsasir Maalim Abdullahi & another (Environment & Land Case E277 of 2020) [2022] KEELC 2564 (KLR)", Case Analysis (2022). Not stated in the judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/2564/eng@2022-07-12

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