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ELCPartially AllowedBPRT Case No. 912 of 2020 (appeal against ruling of 21st December 2022)· [2024] KEELC 6753 (KLR)

Amuga v Ripple Matrix Properties Limited (Environment & Land Case E005 of 2023) [2024] KEELC 6753 (KLR)

Environment and Land Court (Court presided over by a Judge, Nairobi)
24 September 2024
1,791 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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A Kenyan court cut a tenant's rent bill by rejecting inflated floor measurements and striking out an unexplained rent escalation order imposed by the tribunal.

What this practically means

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Executive summary

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This is an appeal against a ruling of the Business Premises Rent Tribunal delivered on 21st December 2022 in BPRT Case No. 912 of 2020, in which the Tribunal had assessed the rent payable on the appellant tenant's premises. The landlord had issued a notice dated 21st September 2020 purporting to increase the quarterly rent from Kshs. 66,068 plus VAT to Kshs. 145,440 plus VAT with effect from 1st December 2020. The Tribunal had fixed the lettable area at 404 square feet, assessed the rate per square foot, backdated the rent to 1st December 2020, and introduced an escalation clause of 10% every two years. On appeal, M.D. Mwangi J held that the Tribunal erred in disregarding the joint measurement report signed by valuers for both parties, which fixed the lettable area at 304 square feet including the apportioned reception. However, the court found no basis to interfere with the Tribunal's assessment of the rate per square foot, being a discretionary assessment not shown to rest on error or extraneous material. The backdating of rent to 1st December 2020 was affirmed, as the landlord's notice had proposed alteration from that date and the tenant did not submit on the issue. The escalation clause was set aside because it was neither prayed for nor explained, 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 the adopted rate with effect from 1st December 2020 (though the order as printed states 1990), setting aside the escalation clause and the award of Kshs. 20,000 costs on the reference, and ordering each party to bear its own costs.

Key legal issues

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01

Lettable area

Holding

The Tribunal erred by ignoring the joint measurements report and increasing the lettable area to 404 square feet; the lettable area is 304 square feet

Reasoning

The Tribunal had ordered a joint measurement after contradicting measurements were submitted. The joint report dated 13th October 2021, signed by valuers for both parties, put the lettable area at 304 square feet and apportioned the shared reception. Ignoring this report and adding 100 square feet for common areas, already accounted for, was without basis.

p. 2
02

Rate per square foot

Holding

The Tribunal's assessment of the rate was a proper exercise of discretion and is not disturbed

Reasoning

The Tribunal explained its basis, having found the tenant's comparables unsatisfactory and adopting rents paid by other tenants in the demised premises per the landlord's report. No error of principle or reliance on extraneous material was established, so the appellate court will not interfere.

p. 3
03

Backdating of rent

Holding

The backdating to 1st December 2020 was proper, as the landlord's notice proposed alteration from that date

Reasoning

It was part of the Tribunal's mandate to determine when the altered rent was payable. The landlord's notice proposed the increase effective 1st December 2020 and the Tribunal agreed with the landlord. The tenant did not submit on the issue before the Tribunal.

p. 3
04

Escalation clause

Holding

The order for rent escalation of 10% every two years was set aside as it was not prayed for and its basis was not explained

Reasoning

The landlord's notice did not notify any intention to escalate rent every two years; the issue was not canvassed before the Tribunal, and the Vice-chair did not explain the basis for the 10% rate every two years, amounting to an arbitrary exercise of discretion.

p. 4

Legal principles established

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  • An appellate court should not interfere with an exercise of judicial discretion unless an error in the exercise of discretion, a wrong principle, or extraneous/irrelevant material is shown
  • A joint valuation report signed by valuers representing both parties should form the basis of the tribunal's determination of the lettable area
  • A tribunal's discretionary order made without any prayer and without explanation of its basis is an arbitrary exercise of discretion

Court orders

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  1. 1.Appeal allowed only on the finding on the lettable area (reduced to 304 square feet) and on the setting aside of the escalation clause
  2. 2.Rent reassessed at 304 square feet at Kshs. 90 per square foot, with effect from 1st December 2020 (as printed, '1st December, 1990')
  3. 3.Tribunal's order on the escalation clause of 10% every two years set aside
  4. 4.Order awarding the Landlord costs of Kshs. 20,000/- in regard to the Reference set aside
  5. 5.Each party to bear its own costs on both the appeal and the reference

Authorities

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Legislation

  • Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301Section 15(2)
  • Civil Procedure ActSection 78

Cases cited (1)

  • United India Insurance Co. Ltd v East African Underwriters (Kenya) Ltd
    [1985] EA
On appeal from
Business Premises Rent Tribunal (BPRT)
BPRT Case No. 912 of 2020
Jurisdiction invoked
Section 15(2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301; Section 78 of the Civil Procedure Act (appellate jurisdiction)

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 6753 (KLR)", Case Analysis (2024). BPRT Case No. 912 of 2020 (appeal against ruling of 21st December 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6753/eng@2024-09-24

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