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ELCPartially AllowedBPRT Appeal (Nairobi) - Memorandum of Appeal dated 20th January 2023 against BPRT Case No. 912 of 2020· [2024] KEELC 6664 (KLR)

Amuga v Ripple Matrix Properties Limited (Environment & Land Case E005 of 2023) [2024] KEELC 6664 (KLR)

Environment and Land Court
24 September 2024
2,471 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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This is an appeal to the Environment and Land Court at Nairobi against the ruling of the Business Premises Rent Tribunal (BPRT) delivered on 21st December 2022 in BPRT Case No. 912 of 2020. The Appellant, a tenant (Amunga & Co. Advocates), had opposed the Landlord's (Tysons Limited) notice dated 21st September 2020 seeking to increase quarterly rent from Kshs. 66,068 plus VAT to Kshs. 145,440 plus VAT with effect from 1st December 2020. The Tribunal found a lettable area of 404 square feet at Kshs. 90 per square foot, backdated the rent to 1st December 2020, added a 10% escalation every two years, and awarded the Landlord costs of Kshs. 20,000/-. M.D. Mwangi, J, re-evaluating the evidence as a first appellate court, found the Tribunal erred in disregarding the joint measurement report signed by both parties' valuers, which fixed the lettable area at 304 square feet with the shared reception apportioned to the tenant. The court upheld the rate of Kshs. 90 per square foot, finding it a proper exercise of discretion, and found no error in backdating the rent to 1st December 2020. However, the escalation clause was set aside because it was neither prayed for nor canvassed and its basis was unexplained, amounting to an arbitrary exercise of discretion. Invoking Section 15(2) of Cap. 301 and Section 78 of the Civil Procedure Act, the court determined the matter finally, reassessing the rent at 304 square feet at Kshs. 90 per square foot from 1st December 2020, set aside the escalation order and the Kshs. 20,000/- costs award, and ordered each party to bear its own costs on both the appeal and the reference.

Key legal issues

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01

Lettable area

Holding

The Tribunal erred by ignoring the joint measurement report of both parties' valuers and finding the lettable area to be 404 square feet; the correct lettable area is 304 square feet.

Reasoning

The Tribunal had ordered a joint measurement after the parties filed contradicting measurements. The joint report, signed by both valuers, apportioned the shared reception to Amunga & Co. Advocates and thus already accounted for common areas. The Vice-chair had no basis to add 100 square feet for common areas, going on a frolic of his own contrary to the reasonable expectation that the joint report would found the determination.

p. 3
02

Rate per square foot

Holding

The Tribunal's assessment of Kshs. 90 per square foot stands, being a proper exercise of discretion.

Reasoning

The Vice-chair based the rate on comparables in the Landlord's report after the Tenant's expert admitted the Tenant's comparables had a huge variance. None of the grounds for interfering with a discretionary decision (misdirection in law, misapprehension of facts, wrong considerations, plainly wrong decision) was established by the Appellant.

p. 4
03

Backdating of rent

Holding

The Tribunal correctly backdated the adjusted rent to 1st December, 2020, as the Landlord's notice proposed alteration with effect from that date.

Reasoning

The issue before the Tribunal was whether the Landlord was justified in increasing rent with effect from 1st December, 2020. Determining when adjusted rent takes effect was within the Tribunal's mandate. The Tenant overlooked the issue and did not submit on it before the Tribunal, while the Landlord had addressed it in its submissions.

p. 5
04

Escalation clause

Holding

The 10% every-two-years rent escalation order is set aside as it was not before the Tribunal and its basis was unexplained.

Reasoning

The Landlord's notice never notified the Tenant of any intention to escalate rent every two years, and the issue was not canvassed before the Tribunal. The Vice-chair also failed to explain the basis of the 10% rate, making the exercise of discretion arbitrary and the order without any factual or legal foundation.

p. 5
05

Final determination of the case by the appellate court

Holding

The court exercised its powers under Section 15(2) of Cap. 301 and Section 78 of the Civil Procedure Act to determine the case finally rather than remitting it for retrial.

Reasoning

The Appellant invited the court to determine the case with finality, and the court accepted, having already made findings on the lettable area and upheld the rate per square foot, in line with the overriding objective of facilitating just, expeditious and affordable resolution of disputes.

p. 5

Legal principles established

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  • A first appellate court must re-evaluate the evidence before the trial court and arrive at its own independent conclusion.
  • An appellate court will not interfere with a discretionary decision unless the judge misdirected himself in law, misapprehended the facts, took into account or failed to take into account relevant considerations, or the decision is plainly wrong.
  • A tribunal may not make orders that were neither prayed for nor canvassed, nor exercise discretion arbitrarily without explaining its basis.

Court orders

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  1. 1.The Tribunal's finding that the lettable area was 404 square feet is set aside; the lettable area is found to be 304 square feet per the joint measurement report.
  2. 2.The Tribunal's assessment of rent payable at Kshs. 90 per square foot is upheld.
  3. 3.The rent payable in respect of the demised premises is reassessed at 304 square feet at the rate of Kshs. 90/- per square foot, with effect from 1st December, 2020.
  4. 4.The Tribunal's order on the escalation clause of 10% every two years is set aside.
  5. 5.The BPRT order awarding the Landlord costs of Kshs. 20,000/- in regard to the Reference is set aside.
  6. 6.Each party to bear its own costs on both the appeal and the reference before the BPRT.

Authorities

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Legislation

  • Landlord and Tenant (Shops, Hotels and Catering Establishments) ActSection 15(2)
  • Civil Procedure ActSection 78

Cases cited (3)

  • Mursal & Ano vs Manese (suing as the legal administrator of Dalphine Kanini Manesa)
    {2022} (Civil Appeal E20 of 2021) KEHC 282 (KLR)
  • Selle & another v Associated Motor Boat Co. Ltd & others
    [1968] E.A 123
  • United India Insurance Co. Ltd v Eat African Underwriters (Kenya) Ltd
    (1985) EA
On appeal from
Business Premises Rent Tribunal (BPRT)
BPRT Case No. 912 of 2020
Jurisdiction invoked
Appellate jurisdiction under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301, including Section 15(2), read with Section 78 of the Civil Procedure Act

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, "Amuga v Ripple Matrix Properties Limited (Environment & Land Case E005 of 2023) [2024] KEELC 6664 (KLR)", Case Analysis (2024). BPRT Appeal (Nairobi) - Memorandum of Appeal dated 20th January 2023 against BPRT Case No. 912 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6664/eng@2024-09-24

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