Rioki Estate Co (1970) Ltd v Kinuthia Njoroge

Court of Appeal for East Africa, Nairobi 26th July 1977

Wambuzi P, Mustafa & Musoke JJ A

Land control - agricultural land - consent to disposal, etc of - failure to obtain consent - Tenant holding over after notice to quit - whether landlord entitled to mesne profits - Land Control Act (cap 302), section 7.

The appellant concluded an agreement in 1972 to lease premises for residential purposes to the respondent. The lease was subject to consent under the Land Control Act, although neither party applied for or obtained such consent within the prescribed three-month period. The respondent entered into possession, paid the rent up to the end of June 1973 and used the premises to entertain tourists. From the beginning of July 1973, the appellant refused to accept any rent and demanded the possession of the premises. The respondent gave up possession in May 1976. The appellant sued the respondent for, inter alia, mesne profits for the period after he had demanded possession. The trial judge found that the agreement was void for want of consent under the Land Control Act, section 6(2). Section 7 of that Act entitled any person who had paid rent in such circumstances to recover it as a debt from the payee. On appeal, on the question of mesne profits,

Held:

Dismissing the appeal, that as the lease was void the respondent’s continued possession of the premises was wrongful from the moment when the appellant had demanded possession, but that it did not necessarily follow that the appellant was entitled to mesne profits in respect of the period of wrongful occupation; the effect of making an award of mesne profits would be to restore to the appellant that which section 7 of the Land Control Act had taken away from him in the guise of rent and the Court would not, in the particular circumstances, make such an award.

Dictum of Briggs JA in Heptulla Bros Ltd v Jambhai Jeshangbhai Thakore [1957] EA 358, 362, EACA, considered.

Dictum of Duffus JA in Chemelil Sisal Estate Ltd v Makongi Ltd [1967] EA 166, 177, EACA, not applied.

Cases referred to in judgment:

Chemelil Sisal Estate Ltd v Makongi Ltd [1967] EA 166, EACA.

Heptulla Bros Ltd v Jambhai Jeshangbhai Thakore [1957] EA 358, EACA.

Hussein Janmohamed & Sons v Twentsche Overseas Trading Co Ltd [1967] EA 287, High Court of Tanzania.

Wambungu v Public Service Commission [1972] EA 296.

Appeal

The Rioki Estate Co (1970) Ltd appealed to the Court of Appeal for East Africa (Civil Appeal No 9 of 1977) against a summary judgment awarded in its favour by Chesoni J in the High Court on 2nd March 1976 (Civil Case No 1200 of 1974) in so far as the judge refused to order the respondent, Kinuthia Njoroge, to pay mesne profits and made no order as to costs. The facts are set out in the judgment of Wambuzi P.

JW Okwach (instructed by Messrs Hamilton Harrison & Mathews) for the Appellant.

S Gautama for the Respondent.

Rogan–Kamper v Lord Grosvenor (No 2)

Court of Appeal for East Africa, Nairobi 7th July 1977

Wambuzi P, Mustafa JA & Platt J

Landlord and tenant - agreement for lease - entry into possession following agreement - nature of tenancy following entry and payment of rent - monthly tenancy or tenancy at will - terms of draft, unexecuted lease inapplicable - Transfer of Property Act (India), section 106.

Landlord and tenant - tenancy - registration - evidence of tenancy – unregistered tenancy not validated by Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (cap 301), section 2(3)

The tenant entered in to an agreement with the landlord in 1969 which was evidenced by a letter sent to the tenant and signed by him. The letter stated that the parties had agreed to enter into a lease for five years and one month for certain premises at a specified monthly rent. The tenant was to occupy the premises from 1st November 1969 and the landlord would arrange for a draft lease incorporating the agreed terms to be drawn up for the tenant’s approval. The tenant duly entered into possession; and it was agreed that the premises fell within the ambit of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act. On 15^th November, a draft lease was submitted to the tenant; despite several reminders, the tenant neither approved nor executed the lease. The tenant paid the rent in full up to 30th April 1970 when he purported to surrender half the premises to the landlord; thereafter he paid or tendered only one half of the agreed rent. In 1971 the landlord, referring to a term in the draft lease entitling him to re-enter the premises for nonpayment of rent, gave the tenant notice to quit and instituted proceedings for ejectment. He did not, however, follow the procedure prescribed by the Act for terminating controlled tenancies.

Held:

That on its proper construction the 1969 agreement was a contract for a lease and, as the only right which flowed from such a contract was the right to seek an order for specific performance, the landlord could not give notice to terminate in accordance with the terms of draft lease; the entry into possession and the and the payment of rent by the tenant together with the acceptance of rent by the landlord created a tenancy which was either, (per Wambuzi P and Mustafa JA) a monthly tenancy terminable by virtue of the Transfer of Property Act (India), section 106, by fifteen days notice or (Per Platt J) a tenancy at will in respect of which no formal notice was necessary; however, as the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act applied to the premises and its procedure had not been followed, the tenancy still substituted.

Ariff v Jadunath Majumdar (1930) 58 Cal 1235, PC, Souza Figuerido & Co Ltd v Moorings Hotel Co Ltd [1960] EA 926, EACA, applied.

Ashmore Benson, Pease & Co Ltd v A V Dawson Ltd [1973] 2 All ER 856 considered.

Grosvenor v Rogan-Kamper [1974] EA 446, EACA, explained. Walsh v Lonsdale (1882) 21 Ch D 9, CA, not applied.

Cases referred to in the judgment:

Abdul Rehman v RH Gudka [1957] EA 4, EACA.

Ariff v Jadunath Majumdar (1930) 58 Cal 1235, PC.

Ashmore, Benson, Pease & Co Ltd v AV Dawson Ltd [1937] 2 All ER 828, [1973] 2 All ER 856, [1973] 2 Lloyd’s Rep 21, CA.

Clarke (Kenneth Thomas) v Sondhi Ltd [1963] EA 107, EACA.

Grosvenor v Rogan-Kamper [1974] E A 446, EACA.

Jagat Singh Bains v Ishmael Mohamed Chogley (1949) 16 EACA 27.

Ramjoo Mohamed v Haridass Mullock (1925) 52 ILR Cal 701.

Souza Figuerido & Co Ltd v Moorings Hotel Co Ltd [1960] E A 926, EACA.

Walsh v Lonsdale (1882) 21 Ch D 9; 52 LJ Ch 2; 46T L 858, CA.

Appeal

In June 1971, Lord Robert Grosvenor, the Landlord, instituted proceedings for ejectment of Dr AW Rogan-Kamper, the tenant, for arrears of rent and mesne profits in the High Court (Civil Case No 786 of 1971). Chanan Singh J dismissed the action with costs. The landlord appealed to the Court of Appeal for East Africa which remitted the case back to the same judge (reported sub nom Lord Grosvenor v Rogan-Kamper [1974] EA 446). On 31st July 1975, Chanan Singh J gave judgment for the landlord and the tenant appealed to the Court of Appeal for East Africa (Civil Appeal No 33 of 1976).

JM Nazareth QC and MR Pabary (instructed by MR Pabary) for the Appellant.

P Le pelley and KA Fraser (instructed by Messrs Hamilton Harrison & Mathews) for the Respondent.

Taws Ltd v Othaya Farmers’ Co-op Society Ltd

Court of Appeal for East Africa, Nairobi 22nd April 1977

Wambuzi P, Mustafa & Musoke JJ A

Contract – formal requirements – lack of prescribed formality – cooperative society ordering goods – goods to value in excess of specified amount – counter-signature required – effect of lack of counter-signature – whether contract illegal – Co-operative Societies Rules, 34(2)(c).

Rule 34(2)(c) of the Co-operative Societies Rules provides: “The committee of a registered society shall - … (c) ensure that … any order for goods in excess of amounts specified hereunder are counter-signed by the Commissioner or a person or persons nominated by him for the purpose … - (i) in the case of a primary society … all orders for purchase in excess of Shs 100 unless placed through a co-operative union; …”

The respondent, a primary co-operative society, ordered stationery from the appellant of a value in excess of 100. On seeking payment, the appellant was told that the respondent relied on the terms of rule 34(2)(c) of the Cooperative Societies Rules under which contracts in excess of Shs 100 in value required a counter-signature, which was missing from the order placed by the respondent with the appellant. The appellant instituted proceedings for payment of the money due under the order. The trial judge ruled that the contracts were rendered illegal ab initio by rule 34(2)(c). On appeal,

Held:

Allowing the appeal, that rule 34(2)(c) was only concerned with the internal administration of co-operative societies and did not affect the validity of contracts with third parties, such as the appellant.

Anderson Ltd v Daniel [1924] 1 KB 138, CA, distinguished.

Case referred to in the judgment:

Anderson Ltd v Daniel [1924] 1 KB 138; 93 LJKB 97; 130 LT 418, CA.

Appeal

Taws Ltd appealed to the Court of Appeal for East Africa (Civil Appeal No 40 of 1976) from the decision of Madan J in the High Court on 3^rd March 1976 (Civil Case No 1450 of 1973) in which he ruled that orders placed by the respondent, Othaya Farmers’ Co-operative Society Ltd, with the appellant for goods exceeding Shs 100 in value were illegal and unenforceable. The facts are set out in the judgment of Musoke JA.

SC Gautama and DV Kapila (instructed by DV Kapila & Co) for the Appellant.

PW Wamae and JW Mwangi (instructed by Messrs Munoru & Njugi) for the Respondent.

Commissioner of Income Tax v Lerematesho Ltd

Court of Appeal for East Africa, Nairobi 31st May 1976

Wambuzi P, Mustafa & Musoke JJ A

Income tax – profits from business – whether business being carried on – onus of proof – East African Income tax Management Act (cap 24, Laws of the Community) sections 3, 103.

The taxpayer company was incorporated in 1957. Its main object was to carry on the business of farming, but its objects clauses were drawn very widely and included a power to purchase and sell shares in other companies. Acting under this power, the taxpayer company bought and sold shares from 1967 onwards; originally, these shares were intended to be held purely as an investment. The Commissioner of Income Tax did not attempt to make any assessment in respect of these transactions under section 3 of the East African Income Tax Management Act until the year of income 1971 when the taxpayer company had made a profit of £6341 from this side of its business. The taxpayer company, denying that it had been carrying on a business of dealings in shares, appealed against the assessment to the local committee. The local committee found that the shares had originally been purchased as an investment and that their sale was merely a realization of that investment; it accordingly ruled in favour of the taxpayer company. The commissioner appealed to the High Court.

The appeal was dismissed. The judge, apparently relying on the findings of fact made by the local committee, held that the failure of the commissioner to raise any assessment on such transaction before 1971 raised a presumption that such profits were not chargeable to income tax; and hence that it was for the commissioner to show that the purpose for which the transactions were carried out had changed and that they were subject to income tax. On further appeal by the commissioner,

Held:

Allowing the appeal,

(1) The judge had referred to the findings of the local committee without any indication whether he agreed with them or accepted them, whereas he was required under section 103(d) of the East African Income Tax Management Act to evaluate the evidence and reach his own conclusions.

O v Commissioner for Income Tax, 1 EATC 124 applied.

(2)That once an assessment to income tax had been made on the taxpayer company the onus of proving that the assessment was excessive was placed upon the taxpayer company by section 103(c) and it had failed to discharge that onus.

Dunn Trust Ltd v Williams (Inspector of Taxes) (1950) 31 TC 477 distinguished.

Cases referred to in the judgement:

Commissioner of Income Tax v NR Bapoo, 2 EATC 397.

Dunn Trust Ltd v Williams (Inspector of Taxes) (1950) 31 TC 477.

O v Commissioner of Income Tax, 1 EATC 124.

Appeal

The Commissioner of Income tax appealed to the Court of Appeal for East Africa (Civil Appeal No 7 of 1976) against a decision of Chesoni J in the High Court (Civil Appeal No 56 of 1974) dated 16th September 1975 in which he upheld a ruling of the Nairobi local committee discharging an assessment made by the commissioner on Lerematesho Ltd in respect of dealings in stocks and shares in the year of income 1971. The facts are set out in the judgment of Wambuzi P.

OM Da Silva and Keiwua (instructed by the Attorney-General) for the Commissioner.

C Salter QC and KA Fraser (instructed by Hamilton Harrison & Mathews) for the Taxpayer Company.

Cur adv vult.

Karatina Garments Ltd v David Nyanarua

Court of Appeal for East Africa, Nairobi 30th April 1976

Wambuzi P, Mustafa & Musoke JJ A

Service of process – dispute – evidence – affidavit by process-server – alleging service – affidavit by alleged recipient denying service – examination of deponents on oath.

Where one party to proceedings denies having been served with a relevant= document, it is proper for the Court to look into the matter; if the Court is faced with conflicting affidavits as to the alleged service of process, it is proper that the deponents should be examined on oath in order to establish the truth.

No case was referred to in the judgment.

Appeal

Karatina Garments Ltd appealed to the Court of Appeal for East Africa (Civil Appeal No 6 of 1976) from an order of Chesoni J in the High Court at Nairobi dated 13th August 1975 in which he set aside a default judgment in favour of the appellant against David Nyanarua (trading as Boisanga Wool Shop), Civil Case No 667 of 1975).

DN Khanna and JH Sampat (instructed by JH Sampat) for the Appellant.

PK Tunoi (instructed by Mbito, Wafula & Kapten) for the Respondent.

Parbat Keshnrwal v Abdul Ismail Nurani

Court of Appeal for East Africa, Nairobi 19th January 1976

Wambuzi P, Mustafa & Musoke JJ A

Time – extension of time limit – grounds for extension – document not complying with formal requirement – memorandum of appeal to Court of Appeal for East Africa not duly signed – advocate not realizing implication of non-compliance.

The failure on the part of an advocate before the Court of Appeal for East Africa to realise that non-compliance with the requirements of the rules of court as to signature of memorandum of appeal nullified the document is no ground for allowing an application to extend the time for filing a valid memorandum.

No cases were cited in the judgment.

Interlocutory appeal:

The appellant, Parbat N Keshanrwal, on an appeal from a decision of Nyarangi J in the High Court at Eldoret dated 15th March 1975 (Civil Case No 96 of 1973) in favour of the respondent to the appeal, Abdul Ismail Nurani, applied to the Court of Appeal for East Africa for leave to file a memorandum of appeal out of time. The facts are set out in the judgment of the court.

FO Amata (instructed by Amata & Co) for the Appellant.

GH Carruthers (instructed by Shaw & Carruthers) for the Respondent.