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Court of AppealPartially AllowedCivil Appeal No 68 of 1983· [1985] KECA 123 (KLR)

SAPRA STUDIO V KENYA NATIONAL PROPERTIES LIMITED [1985] KECA 123 (KLR)

Court of Appeal
25 April 1985
12,738 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~51 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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Sapra Studio, a sub-tenant of Kenya National Properties Limited, negotiated a direct lease effective after the head lease to Kenya Cold Storage (1964) Ltd was to expire on November 7, 1975. Todd J later declared the head tenancy to be a controlled tenancy under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (cap 301), so it did not end on that date. Brar J held the direct-tenancy agreement void for mutual mistake of fact, dismissed Sapra's suit and gave judgment on the landlord's counterclaim. The Court of Appeal (Hancox JA writing the leading judgment, with concurring judgments from Nyarangi JA and Chesoni Ag JA) allowed the appeal on the ground that the mistake was one of law: the parties knew the lease expired on November 7, 1975 but misapprehended the effect of cap 301, and no relief lies for a mistake of law. The agreement was therefore not avoided and was, at most, voidable. The judgment of Brar J was set aside and judgment given for Sapra on the claim. On the landlord's cross-appeal on quantum, the court rejected loss-of-bargain damages for the thirty-five months assessed below, holding they were not within the contemplation of the parties, and substituted a reduced award (Hancox JA: Kshs 48,750; Chesoni Ag JA: Kshs 75,684 on a rental-value measure). Costs of the appeal and three quarters of the High Court costs went to the appellant; cross-appeal costs to the respondent. In a later ruling (June 12, 1985, with Platt Ag JA replacing the resigned Chesoni Ag JA), the court held it lacked jurisdiction to correct its omission to deal with interest on the damages.

Key legal issues

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01

Mutual mistake of fact versus mistake of law

Holding

The mistake of both parties was as to the effect of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (cap 301) on the head tenancy, i.e. a mistake of law, so the agreement for a direct tenancy was not avoided and remained enforceable.

Reasoning

The parties knew the lease would expire on November 7, 1975 and it did; what they misapprehended was the statutory protection that continued the tenancy under cap 301. Halsbury and Jenkins LJ's dissent in Solle v Butcher show that ignorance of the effect of a public statute is a mistake of law for which no relief lies. The trial judge misapprehended Solle v Butcher in holding the contract void for a mistake of fact.

p. 6
02

Distinction between 'lease' and 'tenancy'

Holding

The terms are distinct but the question was not determinative: whichever term was used, neither party was under any misapprehension about the subsisting relationship between Kenya National and Kenya Cold Storage, and Todd J's judgment was merely declaratory.

Reasoning

The court examined dictionary definitions and section 2 of the Act. Chesoni Ag JA held the Act does not allow interchangeability of the terms, but Hancox JA held it mattered not which term was used since the conduct of the parties showed they contemplated the termination of the whole relationship. Todd J's declaration did not change the actual state of affairs.

p. 4
03

Measure of damages for failure to complete an agreement for lease

Holding

The rule in Bain v Fothergill does not apply because the failure was not due to defective title but to a mistake of law and a statutory impediment; damages were assessed on the rent paid, advocates' costs incurred, and nominal damages.

Reasoning

Hancox JA distinguished the defective-title cases and applied Hadley v Baxendale contemplation to reject loss-of-bargain damages. Chesoni Ag JA, dissenting on quantum, applied the normal measure of rental value less contractual rent with a mitigation reduction from April 1976. Both agreed the trial judge's notional figure of Kshs 207,200 could not stand.

p. 11
04

Slip rule jurisdiction of a reconstituted appellate court

Holding

Although the omission of interest was an accidental slip or omission correctable under rule 35 before perfection, neither the remaining members of the original court nor the reconstituted court had jurisdiction to correct it or to rehear the matter de novo.

Reasoning

The authorities show courts have inherent power to recall a judgment before perfection by formal order; the omission of interest was an accidental omission, not a clerical error. But because Chesoni Ag JA had ceased to hold office, the court that gave judgment could no longer exist, and interest could not be argued in isolation from damages. Raniga v Jivraj was not followed on amendment after the formal order.

p. 16

Legal principles established

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  • Relief will not be granted on the ground of a mistake of law as distinguished from a mistake of fact; a contract affected only by a mutual mistake of law is not void.
  • Even a mistake as to a fundamental fact renders a contract voidable, not void, so it remains valid until set aside on some equitable ground.
  • The restrictive rule in Bain v Fothergill on damages for failure to complete is confined to defective title cases and does not extend to a statutory impediment or a mistake of law.
  • A court may correct an accidental slip or omission in its judgment under the slip rule only before the decision is perfected and only by the same constitution of the court; a reconstituted court cannot do so.
  • The terms 'lease' and 'tenancy' are distinct: a lease is the instrument or agreement which gives rise to the relationship of landlord and tenant, while a tenancy is the interest or possession held under it.

Court orders

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  1. 1.Appeal allowed on ground 2 of the memorandum of appeal (mistake was one of law; the agreement was not avoided)
  2. 2.Judgment of Brar J dismissing the action and giving judgment on the counterclaim set aside; judgment given for the appellants on the claim
  3. 3.Cross-appeal allowed to the extent of substituting for the judge's notional figure the damages awarded by the court
  4. 4.Costs of the appeal and three quarters of the costs of the proceedings in the High Court awarded to the appellant
  5. 5.Costs of the cross-appeal awarded to the respondents
  6. 6.On the ruling of June 12, 1985: no order as to costs, the matter having been raised by the court of its own motion
On appeal from
High Court at Nairobi
High Court Civil Case No 539 of 1980
Jurisdiction invoked
Appellate jurisdiction of the Court of Appeal under the Appellate Jurisdiction Act (cap 9), proviso to section 5(3) referred to

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, "SAPRA STUDIO V KENYA NATIONAL PROPERTIES LIMITED [1985] KECA 123 (KLR)", Case Analysis (1985). Civil Appeal No 68 of 1983. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1985/123/eng@1985-04-25

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