Macharia t/a Gusii Properties Club v Dakianga Distributors Limited

that by the time the plainti moved the court for orders of reinstatement, and setting aside of the decision of the BPRT, the said decision had been adopted as a judgment of the court in Kisii CM Miscellaneous Civil Application No. 58 of 2006. He states that the proceedings and judgment in CM Miscellaneous Civil 2006 Application No. 58 of 2006 have never been varied or set aside. He contends that the plainti acted in breach of the terms of the tenancy agreement and he is therefore not entitled to the reliefs sought. 4. The suit was initially led in the High Court in Nairobi before it was transferred to Kisii High Court and eventually to the Environment and Land Court. The hearing commenced before Justice Mutungi when the plainti and his witnesses testied and the plainti’s case was closed. I then proceeded with the defence case. Plainti ’s Case 5. The plainti testied as PW1 and called one witness. He adopted his witness statement dated 13.6.2013. In the said statement he stated that his mother Abigael Wanjiru Mbiri (deceased) was a tenant for many years on the premises situate on land parcel number Kisii Municipality/Block 3/107 (hereinafter referred to as the suit premises) where she operated a business. She had a hotel on one part of the suit while she sub-let the other part to sub-tenants who used to pay her monthly rent totaling Kshs.22,500. On or around December, 2004, the defendant purchased the suit premises from the previous owner and immediately issued his late mother with a notice terminating the tenancy on 11th January, 2005. His mother challenged the notice vide BPRT Case No. 2 of 2005 but the Business Premises Rent Tribunal ruled in favour of the defendant. 6. Being aggrieved by the decision of the Tribunal, his mother lodged an appeal in the High Court vide NBI HCCA N0. 950 OF 2005 and obtained an order of stay of execution. Before the appeal could be heard the defendant evicted his mother and threw out her business goods and equipment thus damaging them. He stated that some of large equipment and xtures remained in the suit premises and they were unable to recover them. The eviction was carried out pursuant to an order obtained from the Chief Magistrate’s Court in Kisii CM Miscellaneous Civil Application No. 58 of 2006. His mother sought an order for reinstatement into the suit premises but this could not be granted as the defendant had leased the premises to another tenant. The appeal was nally heard and determined in his late mother’s favour and the Court held that she was entitled to damages for the wrongful acts of the defendant. The plainti produced a copy of the judgment in HCCA No. 50 of 2005 as Plainti’s exhibit 1. 7. In his statement the plainti stated that they had carried out improvements to the suit premises which were assessed by a valuer in the sum of Kshs.960,000/=. He further stated that the hotel business was well established and they were earning a monthly income of Kshs.200,000/=. 8. Upon cross-examination, the plainti stated that they were earning a rental income of Kshs.22,500/ = from 6 sub-tenants. He said they spent Kshs. 960,000 on improving the premises and they did not recover it from the previous landlord. The said improvements were authorized by the previous landlord. 9. Amos Githaiga Wambugu testied as PW2. He introduced himself as an Accountant. He testied that they had been instructed to prepare the accounts for Gusii Proprietary Club for the period 2004 and 2005. The said accounts were signed by his late colleague Phares Mugo Gathitu. He produced the report as Plainti’s exhibit 3. 10. Since the valuer who prepared the valuation report was said to have relocated to the United States of America, the plainti was recalled to produce the valuation report as the same had earlier on been https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16938/eng@2023-04-20 2

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produced before the Tribunal and the maker had been cross-examined on the same. The same was marked as Plainti’s exhibit 4. Defendant’s Case 11. The Defendant called two witnesses. Charles Nyamumbo Mageto who introduced himself as one of the directors of the defendant company testied as DW1. He relied on his witness statement dated September 28, 2020. He told the court that soon after the company acquired the suit premises, they issued a notice to the tenants terminating the tenancy. The late Abigael Wanjiru Mbiri who was one of the tenants led a case at the Tribunal challenging the termination notice but the tribunal ruled in favour of the defendant. He stated that the decision of the tribunal was adopted by the court and they were given the go ahead to evict the tenants. He stated that he was not aware that there was an appeal and he only learnt of the appeal after eviction. He stated that there was no order for stay of execution at the time of eviction. He told the court that they evicted several tenants who were carrying on business in the suit premises including a hotel. He said he did not know whether the previous owner of the suit premises had given the plainti consent to sub-let the premises. 12. In cross-examination, he stated that he was aware that when Abigael led an appeal against the decision of the Tribunal, the High court in its judgment advised her to le a case for recovery of damages. He admitted that they led an application in the lower court seeking adoption of the Tribunal’s decision and eviction without disclosing that there was a pending appeal. He stated that as part of the eviction process they demolished all the structures on the suit premises as they had bought the premises together with the structures on it. 13. Wilberforce Ocharo Ongaro testied as DW2. He adopted his witness statement dated April 1, 2019 which is similar to the statement of DW1. He said that he worked for the defendant company as an accountant. He produced the documents in the defendant’s list of documents, which were marked as Defendant’s exhibits 1-8. He stated that he was aware that the plainti used to occupy the suit premises but he was evicted by the defendant. He said he was conversant with the cases that had been led by the defendant and the plainti regarding the suit premises. 14. After the close of the defendant’s case, the parties were granted time to le their submissions. Plainti ’s submissions 15. Learned counsel for the plainti summarized the plainti’s case and submitted that in Nairobi HCCA No. 950 of 2005 Justus Munyinyi Macharia (suing as the legal representative of the estate of Abigael Wanjiru Mbiri) v Dakianga’a Distributors Limited which was determined on December 20, 2011, the court found that the defendant was liable to pay compensation to the plainti for unlawful eviction and directed the plainti to le suit for assessment of damages. It was his submission that the defendant had not appealed against the said judgment. 16. It was counsel’s submission that the plainti had proved that he suered special damages which he itemized under various limbs. The rst limb is loss of business earnings. Under this limb counsel submitted that the plainti had been operating his business with his late mother on the suit premises for more than 20 years. He had sub-let part of the suit premises from which he earned a monthly income of Kshs.22,500/= which works out to an annual income of Kshs.270,000/=. He urged the court to award the sum of Kshs.1,350,000/= being the amount lost in a period of 5 years. He submitted that this amount was captured in the valuation report by Legeno Real Estate which was produced as plainti’s exhibit 4. https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16938/eng@2023-04-20 3

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17. The second limb of damages is loss of hotel business. Counsel submitted that the plainti had been operating a hotel business whose annual net income was Kshs.1,475,000/= as per the nancial report prepared by Gathitu & Co. Certied Public Accountants which was produced as Plainti’s exhibit 3. He submitted that that plainti was entitled to the sum of Kshs.7,379,765/= for loss of hotel business for a period of 5 years. 18. The third limb of damages claimed is loss of goods and xtures. Counsel submitted that the plainti incurred the sum of Kshs.960,000/= to carry out improvements to the suit premises as depicted in plainti’s exhibit 4. The xtures were demolished in the course of eviction. 19. The fourth limb of damages is loss of goods and equipment. It was counsel’s submission that the plainti should be awarded a sum of Kshs.240,000/= for the loss and damage suered when his goods and equipment were thrown out of the suit premises at the time of eviction. Though this gure was not supported, he argued that it was a reasonable gure as it was ¼ of the assessed value of improvements. 20. Counsel also submitted that the plainti was entitled to aggravated or exemplary damages as the manner in which he was evicted exposed him to ridicule and embarrassment among his peers and the public and subjected him to nancial loss. He also urged the court to take into account the fact that the defendant had lied to the lower court that there was no appeal pending so as to get an eviction order. Counsel relied on the case of Godfrey Julius Dumba Mbogori & Another v Nairobi City County [2018] eKLR where the court held that the object of exemplary damages is to punish and deter. 21. With regard to exemplary damages, counsel relied urged the court to award the sum of Kshs.20,000,000/=. He relied on the cases of A S T/A Business 2000 v Lakhamshi Virpal Shah & Others [2016] eKLR; Pampa Grill Limited & Another v North Lake Limited & another [2021] eKLR; Stelco Properties Limited & Another v Njugi Ventures Limited & another and Abdullahi Mohammed Farah & 3 others v County Government of Mandera & another [2022] eKLR. He further submitted that in view of the fact that the events leading to this matter commenced in 2006, the above-mentioned awards ought to attract interest from the June 2, 2006. 22. On his part, learned counsel for the defendant summarized the pleadings and framed the following issues for determination. 23. i. Were there interim orders in place at the time of eviction ii. Did the plainti act in breach of the statute and implied terms of the tenancy agreement? iii. Do damages arise from an illegal act where there is a breach of tenancy agreement? iv. Is the plainti entitled to the reliefs sought in the plaint? v. Who should bear the costs of this suit? With regards to the rst issue counsel relied on the ruling of Nambuye J (as she then was) on an application for contempt of court in this HCCA No. 950 of 2005 where she made a nding that the proceedings in Kisii CM Misc App No.58 of 2006 arose because the interim orders granted in the appeal had lapsed. She further held that the jurisdiction of the appellate court was limited to reinstating the stay orders and that the court had no jurisdiction to declare the orders in Kisi CM Misc App No. 58 of 2006 null and void and order reinstatement of the plainti into the suit premises as this exceeded the powers conferred on the court under section 78 of the Civil Procedure Act. She was of the view that the plainti should have moved the court to set aside the ex-parte orders failing which an appeal should have been led in the High Court. The other options open to the plainti were to apply for https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16938/eng@2023-04-20 4

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judicial review to quash the orders of the court or le a declaratory suit followed by an application for mandatory injunction to reinstate the appellant into the suit premises. 24. With regard to the second and third issues, counsel submitted that the plainti did not obtain consent to carry out permanent improvements from either the landlord or Business Premises Rent Tribunal pursuant to section 12 (g) of the Landlord and Tenant, (Shops, Hotels and Catering Establishments) Act cap 301 of the Laws of Kenya. He further submitted that the plainti breached the implied terms of the tenancy agreement by sub-letting and partitioning the suit premises and he was therefore not entitled to recover any damages. 25. It was counsel’s contention that this suit ought to have been led in the Business Premises Rent Tribunal pursuant to section 12 (i) cap 301 and section 91 of the Civil Procedure Act as it arose from the decision of the BPRT which was reversed. 26. Counsel submitted that the plainti did not prove the special damages pleaded and he was therefore no entitled to the same. He relied on the case of Hahn v Singh Civil Appeal No. 42 of 1983 (1985) KLR 716 where the court held that special damages must not only be pleaded but also strictly proved. 27. Having considered the pleadings, evidence on record and the rival submissions, the following issues fall for determination. 28. i. Whether the plainti was entitled to sue for recovery of damages for wrongful eviction. ii. Whether the plainti is entitled to the reliefs sought. The plainti led this suit pursuant to the judgment in Nairobi HCCA No. 950 of 2005 Justus Munyinyi Macharia (suing as the legal representative of the estate of Abigael Wanjiru Mbiri) v Dakianga’a Distributors Limited which was determined on December 20, 2011. In its judgment the court held in part as follows: “ The landlord had purchased the premises. The law required that they wait for ve years before terminating the tenancy but did not. We would hereby hold that the decision of the Hon. Chairperson was contrary to law. The appeal is accordingly allowed, the judgment of the Hon. Chairperson of the tribunal is set aside. We also hold that the doctrine of lis pendentes (sic) would apply to this case. That pending the determination of the matter before the court in land matters, no transaction is to be undertaken on the land and property till the determination of the case is nalized. We further hold that the landlord being alive to the existence of this appeal awaiting determination proceeded “though in bad faith” to evict the tenant, to thereafter place a new tenant on a three- year lease in the premises then thereafter to demolish the premises and thus depriving the rights of the said tenant to the said tenancy and protection of the tribunal. The rule of law must at all times be maintained. In this case it was not. We are concerned that a tenant who has been wronged by the unlawful use of the law should be left without redress. To this end we hold that the landlord by unlawfully evicting the tenant and demolishing the premises should be held liable for his conduct and action. We nd this conduct very wrongful by the landlord towards the tenant, that amounts to an actionable tort. As we cannot make a vain order to reinstate the tenant into the premises, the tenant nonetheless cannot go without redress. We therefore hold that the tenant is entitled to damages for the wrongful act/conduct of the landlord. The parties would in the https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16938/eng@2023-04-20 5

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circumstances be hereby granted liberty to address this court on the assessment of quantum of damages that this court is likely to award. We hereby allow the appeal to that extent with costs to the appellant/original tenant in this appeal and in the tribunal court” 29. The Defendant did not challenge the said judgment on appeal and this court can therefore not reopen the issue as to whether the eviction orders were in place at the time of eviction or whether the High court sitting as an appellate court against the decision of the Tribunal had jurisdiction to issue declaratory orders with regard to compensation as this would amount to sitting on appeal on a judgment of a court of concurrent jurisdiction. 30. I will also not revisit the issue as to whether this suit ought to have been led in the BPRT pursuant to section 12(i) of cap 301 and section 91 of the Civil Procedure Act as this matter was raised by the Respondent as a Preliminary point and the court rendered its ruling on the same on September 29, 2021. 31. I will now proceed to determine if the plainti is entitled to the reliefs sought. In his plaint, the plainti pleaded and prayed for special damages of Kshs.9,929,765/= as well as aggravated damages. The particulars of special damages are set out in paragraph 11(a) – (d) of the plaint. 32. It is trite law that special damages must not only be pleaded but they must be proved. In the case of Hahn v Singh Civil Appeal No. 42 of 1983 [1985] KLR 716 the Court of Appeal held as follows: “ Special damages must not only be specically claimed (pleaded) but also strictly proved… for they are not the direct, natural or probable consequence of the act complained of and may not be inferred from the act. The degree of certainty and particularity of proof required depends on the circumstances and nature of the acts themselves.” 33. In the instant case, the plainti pleaded special damages under various limbs; i) The rst one was loss of rental income accruing from rental houses on the suit premises totaling Kshs.22,500/= per month. With regard to this item, the plainti did not produce any document to show how many sub-tenants he had and how much rent each of them was paying and it is therefore not possible for the court to award the same. ii) Under the second limb the plainti claimed loss of earnings amounting to Kshs.200,000/= per month for a period of ve years. However, the nancial report produced by PW2 indicates that the plainti’s net annual prot as at 2005 was Kshs.1,475,953/=. PW2 explained that the nancial report was prepared using primary documents furnished to him by the plainti and even though the same were not produced at the hearing, I accept the explanation that the plainti lost most of his important documents during the eviction. It is probable that the gure would have increased or decreased over time. However, if this is taken as the average annual income for a period of 5 years the plainti would earn Kshs.7,322,817/= within a period of ve years. iii) The third limb was loss of damaged goods and equipment. Although the plainti claimed Kshs.240,000/= under this category, the same was not supported by any document and it can therefore not be awarded. iv) The fourth claim under special damages is Kshs.960,000/= being the value of improvements undertaken on the suit premises. The plainti stated on oath that the improvements were carried out with the permission of the previous landlord and the same were captured in the https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16938/eng@2023-04-20 6

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valuation report which he produced as plainti’s exhibit 4. Since there is no indication that the previous landlord was opposed to the said improvements, I nd the claim reasonable and I allow it. I therefore award a total sum of Kshs.8,282,817/= as special damages. 34. The other broad category of damages claimed by the plainti is aggravated damages. The principles applied by the court in awarding aggravated damages were summarized by Spry V P in the case of Obongo & another v Municipal Council of Kisumu [1971] EA 91 at page 96 : “ It is well established that when damages are at large and a court is making a general award, it may take into account factors such as malice or arrogance on the part of the defendant and this is regarded as increasing the injury suered by the plainti, as, for example, by causing him humiliation or distress.” 35. The Plainti pleaded that he suered ridicule, embarrassment and inconvenience as a result of his unlawful eviction. DW1 admitted that when he applied for the eviction, he did not disclose that there was a pending appeal. This was not only dishonest but it smacks of malice. In view of the malicious and humiliating manner in which the plainti was treated by the defendant, I award him Kshs.2,000,000/ = as aggravated damages. 36. I therefore, enter judgment for the plainti in the following terms: (a) Special damages in the sum of Kshs. 8,282,817. (b) Aggravated damages in the sum of Kshs. 2,000,000. (c) The plainti is awarded the costs of this suit. (d) Interest on (a) and (b) at court rates from the date of judgment till payment in full. DATED, SIGNED AND DELIVERED VIRTUALLY VIA MS TEAMS PLATFORM THIS 20TH DAY OF APRIL 2023 ............................ J.M ONYANGO JUDGE In the presence of; 1. Mr. Nyang’acha for Mr. Muchangi for the Plainti 2. Miss Nyaenya for Mr. Bosire Gichana for the Defendant Court Assistant: Antony Oniala https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16938/eng@2023-04-20 7

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