The Apex Court of Kenya has ordered Jomo Kenyatta University of Agriculture and Technology to pay Kwanza Estates Ltd Ksh 42.4 million lease rent.
The landmark Judgement comes after JKUAT unsuccessfully challenged an order from the Environment and Land Court that awarded Kwanza Estates Ltd at Ksh 40m compensation court after flopped contract between JKUAT and the estate.
This is after Prof. Ojienda SC, for Kwanza Estates submitted that the Court of Appeal misdirected and erroneously rewrote the terms of a lease in the interchangeable use of frustration.
Brief history of the contract is that the parties entered into a lease agreement on 1st May 2010.
The terms of the lease were that Kwanza Estates Ltd agreed to lease to JKUAT Nakuru Municipality Block 9/90 and the building erected thereon, for a period of six years, which expired on 30th April 2016.
After the expiry of the said lease, the parties entered into another lease agreement of the suit premises for a period of six years, from 1st May 2016 to 30th April 2022.
JKUAT was to pay an increasing annual rent commencing Kshs.45,543,000/- and service charge quarterly in advance, clear of all deductions, and a 5% late payment would be incurred if the sum was not paid within 14 days.
On 10th July 2020, the JKUAT issued a three months’ notice to Kwanza Estates intimating its intention to terminate the lease and vacate the premises.
Upon expiry of the notice period, on 10th October 2020, when JKUAT commenced the process of vacating the suit premises, Kwanza Estates Ltd restrained the University from removing its property from the suit premises by placing security guards and goons at the entry and exits of the premises.
On 2nd June 2021, the Environment and Land Court recorded a consent by the parties to the effect that the respondent would pay to the petitioner an all-inclusive sum of Kshs.40 million, being the cost of restoring the premises to its original state, within forty days from the day of recording the consent.
Dissatisfied by this outcome, JKUAT moved the Court of Appeal in Civil Appeal No. 64 of 2022 claiming the learned judge erred in finding that the lease agreement did not contain a break clause.
The appellate court arrived at the conclusion that the trial court erred in condemning JKUAT to make rental payments for the entire duration of the Lease, when it was no longer using or benefiting from the premises due to forces beyond its control.
Aggrieved by the judgment Kwanza Estates moved to the Supreme Court seeking to quash the Court of Appeal Judgement.
The Supreme Court set aside the decision of the Court of Appeal and upheld that the award to Kwanza Estates Ltd of Kshs.40,000,000/- for restoring the suit premises as per the consent recorded on 2nd June 2021 before the Environment and Land Court stands.
