Stephen Kibathi t/a Malaika Bar v Kabu Kagera & 3 others [2012] KECA 22 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed a landlord cannot claim escrow rent money after agreeing to a Tribunal consent order fixing the rent.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the High Court plaint invoked the court's jurisdiction to determine the correct rent payable by the tenant to the landlords
- 2.Whether the dismissal of the main suit for want of prosecution had the consequence that the money held in escrow should be paid to the landlords
- 3.Whether the landlords were bound by the Business Premises Rent Tribunal consent order of 2nd March 1999 fixing the rent at Kshs.2,400/= per month
- 4.What orders should be made regarding the money deposited in the joint escrow account and in court
Key legal issues
#Scope of the High Court's jurisdiction as delimited by the plaint
The High Court was never asked to decide the rent payable; it was only asked to declare the distress illegal and to grant injunctive and ancillary relief. The rent dispute belonged to the Business Premises Rent Tribunal, which had already dealt with it.
The court examined the six prayers in the plaint of 17th January 1986 and found none sought a determination of rent. The parties themselves treated the Tribunal as the forum for rent disputes, returning there in 1983 and again in 1998. The arguments on rent advanced in the High Court were directed only at whether an injunction should issue. Waki J's finding that dismissal meant the tenants failed to prove their claim rested on a misapprehension of the prayers in the plaint.
Consequences of dismissal for want of prosecution on money held in escrow
The dismissal of the four prayers in the plaint was not an inevitable basis for ordering the escrow money to the landlords, since there was no prayer by the tenant that the money should not be released to the respondent.
Waki J reasoned that because the tenants did not challenge the dismissal, their prayers failed and the money in escrow should go to the landlords. The Court of Appeal held this was illogical: releasing the escrow money could not follow from the dismissal of prayers for a declaration of illegality, an injunction or damages, none of which touched the escrow money. The order exceeded what the plaint had sought.
Binding effect of the Tribunal consent order of 2nd March 1999
The consent order fixing rent at Kshs.2,400/= per month until the tenant vacated on 1st June 1999, coupled with the withdrawal of the notice to increase rent, bound the landlords and defeated any claim to the rent difference held in escrow.
The consent order stated the rent payable was to remain at Kshs.2,400/= until vacation of the premises, and the landlord's notice to increase rent was marked as withdrawn. The landlord therefore agreed that no more than Kshs.2,400/= was payable and could not assert entitlement to the difference. Referring the escrow question back to the Tribunal would merely require it to repeat what it had already decided.
Reopening of an issue already declined twice by the High Court
The court noted with difficulty why Waki J entertained a third application on the same issue between the same parties after Khamoni J had twice dismissed similar applications, but declined to determine the point as it was not agitated before it.
Khamoni J had refused on 6th April 2000 and again on 26th July 2000 to be drawn into directing distribution of the monies in the advocates' joint account, holding the orders on the file should be interpreted as they stood. The court found it difficult to appreciate why a third application was entertained but expressly declined to belabour the point since it was not raised before it, making this an observation rather than a ratio.
Legal principles established
#- A High Court suit whose plaint seeks only a declaration that distress is illegal, an injunction, return of distrained goods and damages does not invoke the court's jurisdiction to determine the correct rent payable; dismissal of such a suit for want of prosecution does not entitle the landlord to money held in escrow pending the rent dispute.
- A party to a Business Premises Rent Tribunal consent order fixing the rent and withdrawing a notice to increase rent is bound by that order and cannot claim the difference held in escrow.
Court orders
#- 1.The order of the High Court dated 17th May, 2002 is set aside
- 2.The money deposited into Barclays Bank, Moi Avenue Branch account No. 4289899 is to be released to the appellant Stephen Kibathi t/a Malaika Bar
- 3.Kshs.20,800/= out of the money deposited into court is to be paid out to the appellant
- 4.The balance of the money deposited into court is to be released to the respondent
- 5.The appellant to have costs of this appeal and costs in the High Court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 156 of 1986
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal over a ruling of the High Court (first appeal on facts and law); no specific constitutional or statutory provision is expressly invoked in the judgment.
Relief refused
#Referral of the question of the escrow money to the Business Premises Rent Tribunal
The Tribunal had already determined the rent by the consent order of 2nd March 1999 and a referral would be an exercise in futility; the matter, over 30 years old, should be brought to an end
Costs
The appellant to have costs of this appeal and costs in the High Court.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
the matter that was brought to the High Court by way of a plaint we have referred to hereabove did not invoke that court’s jurisdiction on the issue of rent payable by the tenant to the landlords in respect of the suit premises
We think the landlord was bound by that order and could not be heard to say he was entitled to anything more
The appeal is allowed. The order of the High Court dated 17th May, 2002 is set aside. In its place we order that the money deposited into Barclays Bank, Moi Avenue Branch account No. 4289899 be released to the appellant Stephen Kibathi t/a Malaika Bar.
Those arguments were advanced to persuade the High Court on whether or not to issue injunction. None of the parties was asking the High Court to decide on the rent payable.
Issues in the judgment
#The judgment contains internal date inconsistencies: the interim orders by O'Connor J are described as issued on 17th January 1986 but also referred to as '15th January, 1986' and by 'O'Cannor J'; the interpartes hearing is set for 24th January 1986 but later referred to as '24th July, 1986'; the Tribunal order is dated 26th August 1983 in the proceedings extract but described as made on 23rd August 1983; the dismissal application is dated 31st May 2000 in one place and 31.5.1999 in Khamoni J's quoted order.
The judgment refers to a fifth respondent (the auctioneer) and four landlords including Gideon Njuguna in the narrative, yet the cause title lists only three individual respondents and does not include Gideon Njuguna; counsel is also recorded as stating only Gideon Njuguna remained a party, though the judgment elsewhere states the first respondent passed on in May 1994.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Stephen Kibathi t/a Malaika Bar v Kabu Kagera & 3 others [2012] KECA 22 (KLR)", Case Analysis (2012). Civil Appeal No. 321 of 2002. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2012/22/eng@2012-04-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.