https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5125

REPUBLIC OF KENYA IN THE ENVIRONMENT AND LAND COURT AT KAKAMEGA ELC APPEAL NO. E068 OF 2024 BENEDETA IMBWAKA T/A BUSY BRAINS SCHOOL KAKAMEGA........................................................................APPELLANT VERSUS ALBERT AMAYI KWAJI...................................................RESPONDENT (Being an appeal from the Judgment of Hon. J. J. Masiga, Principal Magistrate, delivered on 30th September 2024 in Kakamega CM ELC Case No. E260 of 2023) **JUDGMENT** **A. INTRODUCTION** 1. This is a first appeal from the judgment of the Principal Magistrate in Kakamega CM ELC Case No. E260 of 2023 delivered on 30th September 2024. 2. The appellant, who operates Busy Brains School Kakamega, was the plaintiff before the subordinate court. She challenged the respondent’s demand for rent arrears and contended that the parties had varied the monthly rent payable under their written lease agreement during the Covid-19 pandemic. 3. The respondent denied that there had been any variation. He maintained that the contractual rent remained KShs. 65,000/= per month and counterclaimed for rent arrears. 4. The learned magistrate dismissed the appellant’s claim and allowed the respondent’s counterclaim in the sum of KShs. 3,696,400/=. 5. The appeal principally raises two questions. First, whether the appellant proved that the parties agreed to vary the rent stipulated in the written lease. Secondly, whether the trial court was entitled to enter judgment for an amount that, in substance, included rent which had not accrued by the date of judgment under a lease that remained subsisting. 6. Having reconsidered the record, the judgment appealed from and the parties’ submissions, I find that the appeal succeeds only to a limited extent. The appellant did not prove a binding variation of the lease or an estoppel preventing the respondent from enforcing its agreed terms. However, the counterclaim could only be allowed in respect of rent that had accrued and was proved as at the date of the judgment. The award, to the extent that it included unaccrued future rent, cannot stand. **B. BACKGROUND AND THE PROCEEDINGS BEFORE THE TRIAL COURT** 1. On 30th October 2019, the parties entered into a written lease agreement in respect of land parcel number ISUKHA/SHIRERE/6279. The appellant took possession of the premises for the purpose of operating a school. 2. The lease was for a fixed term of seven years commencing on 1st January 2020 and ending on 31st December 2026. The agreed monthly rent was KShs. 65,000/=. 3. It was common ground that the appellant established and operated Busy Brains School on the premises. It was also not disputed that rent arrears subsequently arose. 4. The appellant’s case was that, following the disruption of educational institutions during the Covid-19 pandemic, she approached the respondent and the parties agreed to reduce the monthly rent from KShs. 65,000/= to KShs. 40,000/=. 5. She contended that she continued to pay rent on that basis for a considerable period and that the respondent accepted those payments without protest. She consequently maintained that the respondent could not later demand the difference between KShs. 65,000/= and KShs. 40,000/= as arrears. 6. The respondent denied any agreement to vary the lease. His position was that the written lease remained in force throughout; that payments below KShs. 65,000/= were received only as part-payments; and that they did not amount to an agreement to revise the rent. 7. The learned magistrate found that no variation of the lease had been proved. The court further found that rent arrears had accrued and entered judgment for the respondent on the counterclaim in the sum of KShs. 3,696,400/=. **C. THE APPEAL** 1. The memorandum of appeal contains several grounds. Properly understood, they raise the following complaints: 2. That the learned magistrate erred in finding that the appellant had not proved a variation of the lease; 3. That the court failed to give proper effect to the evidence, including the parties’ communications and the conduct said to demonstrate acceptance of a reduced rent; 4. That the court erred in allowing the counterclaim in the sum awarded; and 5. That the court improperly awarded rent extending into periods that had not yet fallen due under the subsisting lease. 6. The appellant submits that the lease was varied by mutual agreement during the pandemic and that the respondent’s acceptance of rent at KShs. 40,000/= per month created an estoppel against a later demand for the contractual rent. 7. The respondent supports the judgment. He submits that the written lease was never varied; that the appellant’s payments were inconsistent and irregular; and that the amounts received were properly treated as part-payments of the contractual rent. **D. DUTY OF A FIRST APPELLATE COURT** 1. This being a first appeal, this Court is required to reconsider, re-evaluate and analyse the evidence that was before the subordinate court and thereafter draw its own independent conclusions. In doing so, it must bear in mind that it did not see or hear the witnesses testify. 2. That duty was explained in *Selle & Another v Associated Motor Boat Co. Ltd* [1968] EA 123. An appellate court must subject the record to fresh scrutiny and reach its own conclusions while making due allowance for the advantage enjoyed by the trial court in seeing and hearing the witnesses. 3. The appellate function does not mean that every factual finding is lightly disturbed. Intervention is warranted where the trial court misapprehended the evidence, applied an incorrect legal principle, overlooked material evidence, relied upon irrelevant matters, or reached a conclusion unsupported by the evidence as a whole. **E. ISSUES FOR DETERMINATION** 1. Having considered the pleadings, the evidence, the judgment appealed from and the submissions, the following issues arise for determination: 2. Whether the parties entered into a binding variation of the written lease agreement; 3. Whether the respondent was estopped from demanding rent at the contractual rate of KShs. 65,000/= per month; 4. Whether the respondent established his counterclaim for rent arrears; 5. Whether the trial court erred in awarding rent that had not accrued by the date of judgment; and 6. What orders ought to issue. **F. ANALYSIS** **(i) Whether the lease was varied** 1. The starting point is the written lease. It fixed the monthly rent at KShs. 65,000/= for a term commencing on 1st January 2020 and ending on 31st December 2026. 2. The appellant’s case is not that the lease was invalid or that its terms were affected by fraud, mistake, coercion or undue influence. Her case is that, after the lease had taken effect, the parties agreed to alter the monthly rent to KShs. 40,000/=. 3. A contract may, of course, be varied by the agreement of the parties. However, the party who asserts a variation bears the burden of proving it. Where the original agreement is in writing and states the material term sought to have been altered, clear evidence is required to establish that the parties subsequently agreed upon a different obligation. 4. The appellant relied on her oral testimony and that of PW2, who stated that he engaged the respondent and that the respondent accepted the proposal for a lower rent. The respondent denied that account and maintained that he only accepted amounts paid from time to time as part-payment of the rent due. 5. The alleged variation concerned the central financial obligation under a seven-year lease. Yet no written addendum, memorandum, email, text message expressly recording an agreed revised rent, or other document acknowledging a permanent variation was produced. 6. I accept that an agreement to vary a contract need not invariably be in writing merely because the original contract was written. But the absence of contemporaneous documentary evidence is material where the alleged variation is denied and concerns a substantial and continuing reduction of the agreed rent. 7. The pattern of payments does not provide the necessary confirmation. The appellant did not demonstrate consistent payment of precisely KShs. 40,000/= per month over an identifiable period pursuant to a settled variation. Rather, the payments were irregular and varied in amount. 8. That evidence is more consistent with the respondent’s position that he accepted partial payments from a tenant experiencing financial difficulty, without giving up his right to recover the balance under the lease. 9. The principle in ***National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] KLR 112*** remains applicable. A court does not remake the parties’ bargain merely because the performance of the bargain later becomes difficult. The parties remain bound by their agreement unless a lawful basis for alteration is established. 10. I therefore find that the appellant did not prove, on a balance of probabilities, that the parties mutually agreed to reduce the rent permanently from KShs. 65,000/= to KShs. 40,000/= per month. **(ii) Whether estoppel applies** 1. The appellant also invokes promissory estoppel. She argues that the respondent’s acceptance of payments at or below KShs. 40,000/= created a representation that the rent had been reduced and that it would be inequitable for him to revert to the rent stipulated in the lease. 2. Promissory estoppel is founded upon a clear and unequivocal representation or promise intended to affect the legal relationship between the parties, reliance upon that representation, and the inequity that would result if the maker of the representation were permitted to resile from it. 3. The doctrine is not established merely because a creditor has accepted a lesser sum on particular occasions. Commercial parties may accept partial payments for practical reasons, including the preservation of an ongoing relationship, without surrendering their contractual entitlement to the outstanding balance. 4. In this case, there was no clear evidence that the respondent expressly represented that KShs. 40,000/= would replace KShs. 65,000/= as the rent payable throughout the remaining term of the lease. Nor was there evidence that he permanently waived the difference. 5. The payments themselves, being inconsistent and irregular, did not evidence an agreed new monthly obligation. They could not, without more, establish an unequivocal promise capable of displacing the express term in the lease. 6. I therefore find that the appellant did not establish the factual foundation for promissory estoppel. The respondent was not precluded from demanding rent at the contractual rate, subject to proper credit being given for all sums received. **(iii) Whether the counterclaim was established** 1. The evidence disclosed that rent arrears existed. The appellant did not contend that she had paid all rent due at the contractual rate. Her principal position was that the arrears had been overstated because the parties had agreed upon a lower rent. 2. Having found that no binding variation or estoppel was proved, it follows that the respondent was entitled to recover rent arrears computed at KShs. 65,000/= per month, less all payments shown to have been made by the appellant. 3. The learned magistrate was therefore entitled to uphold the counterclaim in principle. The dispute is not whether arrears were recoverable, but whether the particular sum awarded represented only accrued and proved arrears as at the date of judgment. **(iv) Whether the award included unaccrued future rent** 1. The lease had not expired when judgment was delivered on 30th September 2024. It was to remain in force until 31st December 2026. 2. The trial court awarded KShs. 3,696,400/= notwithstanding its own observation that rent for certain periods, including June 2024 to September 2024, had not been conclusively ascertained. The practical effect of the award was to include amounts extending beyond rent that had fallen due by the date of judgment. 3. With respect, that was erroneous. A money decree founded on a counterclaim for rent must ordinarily be confined to sums that have accrued, fallen due and are capable of ascertainment at the date judgment is entered. 4. Rent which will become payable in the future under a continuing lease is not, merely by reason of an earlier default, converted into a presently recoverable debt. A different conclusion might arise where the lease had lawfully been terminated, or where it contained an enforceable acceleration clause enabling the landlord to demand the entire balance of rent for the unexpired term. No such basis was established here. 5. I have considered the decisive legal propositions advanced by both parties. The respondent was right to rely on the sanctity of the written lease and the general principle that courts do not rewrite contracts. That principle is applied in upholding the finding that no reduced rent was proved. The appellant, however, was equally entitled to insist that a counterclaim must be proved and that a court cannot award sums which had not accrued under a subsisting contract. Those propositions are not inconsistent. They require enforcement of the agreed rent, but only as and when it became due. 6. The trial court’s finding that rent arrears existed is therefore upheld. The quantum awarded cannot be sustained because it was not confined to arrears that had accrued and were proved as at 30th September 2024. 7. This conclusion does not deprive the respondent of any contractual remedy in respect of rent subsequently accruing under the lease. It merely recognises that claims for future rent must be pursued, if necessary, when the relevant obligations have crystallised, subject to the terms of the lease and the applicable law. **G. DISPOSITION** 1. In the result, the appeal partially succeeds. I accordingly make the following orders: 2. The finding of the trial court that there was no binding variation of the lease agreement is upheld. 3. The dismissal of the appellant’s substantive claim is upheld. 4. The finding that the respondent was entitled to recover rent arrears under the lease is upheld. 5. The order entering judgment for the respondent on the counterclaim in the sum of KShs. 3,696,400/= is set aside. 6. The matter is remitted to the trial court for the limited purpose of determining and entering judgment on the rent arrears, if any, that had accrued and were payable as at 30th September 2024. 7. In undertaking that exercise, the trial court shall rely on the evidence already on record and shall: 1. ascertain the rent due and payable up to and including 30th September 2024; 2. deduct all payments by the appellant that are proved on that record; and 3. enter judgment only for the net balance thereby established. 8. No rent falling due after 30th September 2024 shall be taken into account in the computation or included in the judgment. 9. The trial court may give such limited consequential directions as are strictly necessary to implement these orders, but shall not reopen the hearing or revisit the merits of the parties’ respective claims. 10. Each party shall bear its own costs of the appeal. It is so ordered. DATED, SIGNED AND DELIVERED VIA MICROSOFT TEAMS AT VIHIGA THIS 13TH DAY OF JULY 2026. P. MUSYIMI JUDGE **In the presence of:** Mr. Ajevi: Court Assistant Ms. Chrono Adv h/b for Mr. Nandwa for the Appellant Mr. Mukhavala Adv for the Respondent