[2023] KEHC 26557 (KLR)

Ayoro v Amboga (Commercial Appeal E026 of 2021) [2023] KEHC 26557 (KLR) (Commercial and Tax) (8 December 2023) (Judgment)

Neutral citation: [2023] KEHC 26557 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Appeal E026 of 2021

FG Mugambi, J

December 8, 2023

Between

Charles Odhiambo Ayoro

Appellant

and

Catherine Miriam Amboga

Respondent

(Appeal Against judgment of Honourable D.M.Kivuti (P.M) delivered on 11th March 2021 in Milimani CMCC No.511 of 2019. )

Judgment

Background 1. This appeal challenges the judgment of Honourable D.M.Kivuti (P.M) delivered on 11th March 2021 in Milimani CMCC No.511 of 2019. The dispute between the parties arises from a lease agreement dated 28th November 2018 over a residential apartment number D7 situated at Seven Heights Apartments whereby the appellant was the landlord and the respondent was the tenant.

2. The lease was for a period of 2 years commencing on 1st January 2019 at a monthly rent of Ksh.160,000/=. Upon executing the lease, and in consonance with the lease, the respondent paid to the appellant two months deposit plus one month rent amounting to Ksh.480,000/-. A dispute thereafter ensued between the parties, and a suit was filed at the lower court.

3. The appellant being dissatisfied with the judgment of the lower court filed a Memorandum of Appeal dated 30th March 2021. It raises 8 grounds of appeal. The appellant in the end prays that:i.The Judgment dated 11th March 202l be set aside;ii.The High Court does re-evaluate the evidence and rule the matter in favour of the appellant.iii.The award on quantum (as set out in the judgment) be dismissed /set aside;iv.A declaration (be issued) that the respondent breached the STRICT terms of the lease.v.A declaration (be issued) that the respondent is obliged to pay the appellant the sum of KES, 1,760,000/= being the balance of rent due under the 1st year of the lease (as set out in the lease).vi.A declaration (be issued) that the respondent is obliged to pay damages to the appellant pursuant to the damage occasioned by the unauthorised modifications (the respondent) made on the said premises (Apartment 07).vii.Costs of this appeal be awarded to the appellant;viii.The Honourable Court does order any other relief or further relief as it may deem fit or necessary to grant.

4. The appellant also filed written submissions dated 23rd August 2022. In response to the appeal the respondent filed written submissions dated 29th September 2022.

Analysis 5. The Court has carefully considered the pleadings, submissions and authorities cited by rival parties in support of their arguments. I need not regurgitate the submissions at this point but I will refer to them within this decision to guide my analysis of the facts and the law.

6. Being a first appeal, the Court has also analysed the evaluation of the facts and evidence by the trial Court. The grounds of appeal as stated raise the following issues for determination which I shall proceed to determine:

Whether the respondent was in breach of the lease agreement dated 28th November 2018. 7. The appellant submitted that the respondent breached the lease agreement by terminating it before the lapse of one year. Further that the respondent carried out modifications on the apartment without any authorisation from the appellant and the relevant authorities. The appellant took issue with the trial court for failing to enforce the express terms of the lease and not finding that the respondent was in breach.

8. It countering this argument the respondent submitted that the appellant was aware of the modifications carried out to the apartment and was therefore estopped from denying that fact. The respondent argued that in any case, the lease agreement was dead on arrival. This is because the respondent never took occupation of the apartment as the appellant denied her access into the apartment without any plausible explanation.

9. The lease agreement on record is executed by both parties. Neither of the parties have raised any doubts as to its validity and this is therefore not in issue. Like any other contract, the parties are bound by the terms of their agreement and it is not for the Court to interfere with that contractual freedom. Having said that, my attention is drawn to Clause 10 of the agreement which states in part that:“The tenant cannot undertake any construction or transformation in the premises without the explicit authorisation from the landlord, except for the urgent repair.”

10. Clause 19 on the other hand states that:“This lease is fixed for a term of two years renewable by mutual agreement and as stated above … termination by either party can only be given upon completion of a one-year lease by either party giving two months’ notice.”

11. The terms of the contract are explicit with respect to the two issues raised in the appeal. That the respondent was required to obtain explicit permission from the appellant before undertaking any repairs. Secondly, there was an option for the respondent to terminate the lease upon the expiry of one year. Most importantly though, the respondent was entitled to possession and quiet possession for that matter.

12. On the issue of the repairs done to the apartment D7, no evidence has been provided to demonstrate that there was express written authority from the appellant to carry out the repairs. It is however evident that the appellant was aware that such repairs were being carried out on the subject apartment.

13. I say so because the appellant’s witness statement refers to the said modification and notes that most of the modifications had not been consented to by the appellant. The statement does not elaborate further as to what was not consented to and what was consented to. The appellant also confirms that he allowed the respondent to store her items in an alternative apartment.

14. I find it hard to believe that the appellant would be so philanthropic to accommodate a tenant who had decided to carry out unauthorised repairs in his premises instead of castigating the tenant and having them move out of the premises!

15. In fact, I find that the appellant waived his own terms of engagement with the respondent by his conduct. I borrow from finding of the Court of Appeal in the case of John MburuvConsolidated Bank of Kenya [2018] eKLR referring to the case of D&C BuildersvSidney Rees [1966] 2 QB 617 where Lord Denning, M. R. stated:“It is the first principle upon which all courts of equity proceed, that if parties, who have entered into definite and distinct terms involving certain legal results, afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or be kept in suspense, or held in any event, the person who otherwise might have enforced those rights will not be allowed to enforce them when it would be inequitable having regard to the dealings which have taken place between the parties.”

16. It is clear that the original intention of the parties during the course of negotiations of the lease was to have written approvals before any repair works were carried out. This term of the contract was waived by the conduct of the appellant and the respondent relied on that conduct and went on to carry out the works. It appears that both parties were comfortable…at least for a while.

17. How else would one construe the fact that the said works went on for a period of 2 months without the appellant raising concern? At least no evidence has been led towards such concern being raised. The appellant himself confirms that he even accommodated the respondent by giving her alternative storage for her items during the modifications to the apartment D7.

18. This court is called upon to determine whether there has been a breach of the contract by the respondent. In my view, again taking queue from the Court of Appeal, it would be unconscionable for a party to be permitted to deny that which knowingly, or unknowingly, he has allowed or encouraged another to assume to his detriment.

19. As Mwera, J. (as he then was) stated in Housing Finance Company of Kenya LtdvNjuguna, LLR 1176 (CCK):“Contracts belong to parties and they are at liberty to negotiate and even vary the terms as and when they choose.”

20. I am equally reminded that the function of courts is to enforce and give effect to the intention of the parties as expressed in their agreement. In the English Court of Appeal case; Globe Motors Inc & OthersvTRW Lucas Electric Steering Ltd & Others, Lord Justice Beatson stated as follows:“Absent statutory or common law restrictions, the general principle of the English law of contract is [that parties to a contract are free to determine for themselves what obligations they will accept]. The parties have the freedom to agree whatever terms they choose to undertake, and can do so in a document, by word of mouth, or by conduct.”

21. That court further stated that even where the contract contained a 'no oral variation' clause, the parties were at liberty to make a new contract varying the original contract by an oral agreement or by conduct.

22. Against this background I would therefore answer this question in the negative and state that in my view, the respondent did not breach the term of the lease that required express approval of any modification works. The parties had by their conduct varied this term of the contract and the appellant being aware of the modification that was being undertaken by the respondent and having failed to raise any objection during the period when the works were being undertaken is estopped from claiming that the appellant had not explicitly obtained authorisation from him.

Whether the respondent was justified in cancelling the lease. 23. What is further evident from the record is that the appellant barred the respondent from taking occupation of apartment D7, despite the modifications she carried out. Instead the appellant offered the respondent an alternative apartment (D3) to move into and it was then that the respondent chose to terminate the contract. The respondent made it very clear that her intention was to occupy D7 and not D3. In any case it would beat logic why the respondent would occupy another house having made modifications to another.

24. The question to ask is whether the contract had become impossible to perform. I would not exactly say that the contract was frustrated because the events in question were not out of the control of the parties. Had the contract altered in its nature? I would say so. The contract was voidable meaning that it could be rendered unenforceable for any number of legal reasons.

25. The Black’s Law Dictionary describes a voidable contract as one which is valid until annulled; or capable of being affirmed or rejected at the option of one of the parties. The respondent had the option of remaining in or avoiding the contract. She chose the latter and, in my view, she was within her rights to do so, noting the turn of events.

26. The Halsbury’s Laws of England, Volume 9(1) at paragraph 607 defines a voidable contract as one which is initially valid but where one or more of the parties has a right of election to avoid or continue and so validate it.

27. Finally, as to whether the appellant is entitled to the prayers sought, I would think not. The respondent chose to avoid the contract as a result of the drastic change of the terms by the appellant. The respondent was clear in her mind that she wished to rent apartment D7 which she had modified, and not D3 which was later offered to her. The contract was eventually avoided at her instance, without having enjoyed the benefit of the house. She cannot therefore be the one to compensate the appellant for drastically varying a material component of the agreement, which was the subject matter of the contract.

Determination and final orders 28. The upshot of this is that the appeal lacks merit and it is dismissed with costs to the respondent.

DATED, SIGNED AND DELIVERED IN NAIROBI THIS 8TH DAY OF DECEMBER 2023. F. MUGAMBIJUDGE