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ELCPartially AllowedEnvironment & Land Case 389 of 2015 & 30 of 2016 (Consolidated)· [2023] KEELC 16452 (KLR)

Syke Enterprises Limited & 2 others v Moi Teaching and Referral Hospital Staff Pension Scheme & 4 others

Environment and Land Court
22 March 2023
5,707 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~23 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that an unsigned rent reduction agreement was unenforceable, but the landlord's own repair failures limited what it could recover.

What this practically means

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Executive summary

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Two consolidated Environment and Land Court suits at Eldoret arose from a lease dated August 6, 2013 over Land Parcel No Eldoret Municipality Block 4/332, with an eight-storey hotel building, between Moi Teaching and Referral Hospital Staff Pension Scheme (landlord) and Syke Enterprises Limited/Hotel Horizon Limited (tenants). The tenants claimed the rent had been reviewed downwards to Kshs 1,200,000 per month following a May 8, 2015 meeting, and sought injunctions, declarations and damages after distress for rent was levied. The landlord admitted the lease but asserted rent arrears, denied any binding variation absent written confirmation, and counterclaimed for accrued rent, service charge, rent for the unexpired term, repairs, utilities, VAT and legal fees against the tenants and guarantors. The court found the lease required any variation to be in writing and signed (clause 9.5); the tenants never signed the review offer, so the graduated lease rent applied. The tenants were in rent arrears when distress was levied, making the distress lawful, and their suits were dismissed. However, the landlord was itself in breach for failing to repair reported structural defects, defeating its claim for rent for the unexpired lease term, and its special damages for repairs and utilities were unproved. The counterclaim succeeded only in part: Kshs 19,115,000 in accrued rent and service charge plus Kshs 500,000 legal fees, with costs to the landlord in both suits and the counterclaim.

Key legal issues

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01

Whether the rent was validly varied to Kshs 1,200,000 per month for 2015

Holding

No valid variation; the lease rent schedule governed because any variation had to be in writing and signed under clause 9.5

Reasoning

The court found the plaintiff never signed or confirmed the rent review offer as required by clause 9.5 of the lease. The plaintiff's own conduct of paying Kshs 1,200,000 could not override the written-variation clause. The plaintiff failed to prove the relief extended beyond June 2014 and could not invite the court to rewrite the lease.

p. 7
02

Whether the distress for rent was lawful

Holding

Lawful, as the plaintiff was evidently in rent arrears when distress was levied

Reasoning

PW1 admitted arrears of Kshs 3,600,000 for October to December 2015 and conceded arrears as at June 2015. The distresses by Jomoki and Eshikoni auctioneers were therefore lawful under section 3 of the Distress for Rent Act and clause 9.3 of the lease.

03

Whether the defendant breached the lease by failing to repair structural defects

Holding

Yes; the defendant failed to act on reported structural defects within reasonable time or at all

Reasoning

The plaintiff reported defects by letters dated October 2013 to May 2015. The defendant responded only twice and promised a consultant assessment but never acted. This breach disentitled the defendant to rent for the unexpired lease term after the plaintiff vacated.

04

Entitlement to damages

Holding

Neither party entitled to general damages; defendant's special damages largely unproved except accrued rent and legal fees

Reasoning

Both parties were in breach, so general damages were unavailable. The defendant's claims for repairs, utilities and VAT lacked documentary proof, failing the strict-proof requirement for special damages. Only particularized rent arrears of Kshs 19,115,000 and legal fees of Kshs 500,000 were established.

p. 9

Legal principles established

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  • A variation of a lease requiring amendment in writing signed by the parties is not binding unless those formalities are met
  • Courts will not rewrite contracts between parties absent coercion, fraud or undue influence
  • General damages are not recoverable for breach of contract
  • Special damages must be specifically pleaded and strictly proved
  • A contracting party in default cannot obtain an injunction to restrain breach by the other party

Court orders

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  1. 1.The plaintiffs in both Eldoret ELC No 389 of 2015 and 30 of 2016 failed to prove their claims on a balance of probabilities and their suits are dismissed with costs
  2. 2.The defendant/plaintiff in the counterclaim is awarded Kshs 19,115,000 and Kshs 500,000 against the plaintiff/1st defendant in the counterclaim under prayers (a) and (f) of the counterclaim
  3. 3.The plaintiff/1st defendant in the counterclaim to pay the defendant/plaintiff in the counterclaim costs

Authorities

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Legislation

  • Distress for Rent ActSection 3
  • Civil Procedure ActSection 27

Cases cited (11)

  • Jiwaji versus Jiwaji
    [1968] EA 547

    Unambiguous agreements must be construed according to the clear words of the parties

  • Feba Radio (Kenya) Ltd t/a Feba Radio versus Ikiyu Enterprises Ltd
    [2017] eKLR

    Approved Jiwaji v Jiwaji on construction of unambiguous agreements

  • Pius Kimaiyo Langat versus Co-operative Bank of Kenya Ltd
    [2017] eKLR

    Courts do not rewrite contracts; parties bound by terms absent coercion, fraud or undue influence

  • Kenya Tourist Development Corporation v Sundowner Lodge Limited
    [2018] eKLR

    General damages are not recoverable in breach of contract

  • Dharamshi v Karsan
    [1974] EA 41

    General damages not allowable in addition to quantified damages

  • Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited
    [2016] eKLR

    Special damages must be specifically pleaded and strictly proved

  • National Social Security Fund Board of Trustees vs Sifa International Limited
    (2016) eKLR

    Pleading and proof of special damages

  • Macharia & Waiguru vs Muranga Municipal Council & Another
    (2014) eKLR

    Pleading and proof of special damages

  • Provincial Insurance Co. EA Ltd vs Mordekai Mwanga Nandwa
    KSM CACA 179 of 1995

    Special damages must be pleaded; no general damages for breach of contract

  • David Mushokambere v Qwanza Homes Limited
    [2015] eKLR

    Parties bound by terms of agreements

  • Ripples Limited v Kamau Mucuha
    Nairobi High Court Civil Case Number 4522 of 1992

    Defaulting party cannot obtain an injunction to restrain breach by the other party

Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over the lease dispute concerning Land Parcel No Eldoret Municipality Block 4/332

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, "Syke Enterprises Limited & 2 others v Moi Teaching and Referral Hospital Staff Pension Scheme & 4 others", Case Analysis (2023). Environment & Land Case 389 of 2015 & 30 of 2016 (Consolidated). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16452/eng@2023-03-22

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