Sapra Studio v Kenya National Properties Limited
Court of Appeal, at Nairobi
April 25, 1985
Hancox, Nyarangi JJA & Chesoni Ag JA
Civil Appeal No 68 of 1983
(Appeal from the High Court at Nairobi, Brar J)
Contract – mistake – mistake of law – mistake as to the effect of a public statute - whether such mistake rendering contract void.
Contract – breach of – damages for – measure of such damages – where breach occasioned by common mistake of law.
Landlord and Tenant – agreement to lease – parties under a common mistake of law – effect of such mistake on agreement – damages to which innocent party entitled – measure of damages.
In 1961, company M leased certain parts of its premises to company K for a term which was to expire on November 7, 1975. In 1965, the unexpired portion of the lease was assigned to company KC and in 1973, the premises were acquired by the respondent, subject to the remainder of the lease to KC. KC had, in turn, sub-leased part of their area to the appellant for a term of five years also expiring on November 7, 1975.
After this date, the appellant, who desired to be a direct tenant of the respondent, continued to occupy the premises and paid its rent to the respondent directly for six months. In due course, KC contended that the lease to it fell within the meaning of a controlled tenancy under section 2(1) of the Landlord & Tenant (Shops, Hotels & Catering Establishments) Act (cap 301) and that the appellants were still their subtenants, and in a suit against the respondent, KC obtained a declaration to that effect.
The appellant then sued the respondent upon the agreement to grant the appellant a lease after November 7, 1975. In dismissing the suit, the trial judge held that the parties had been under the mistaken belief that the lease to KC would expire on 7th November, 1985, a mistake of fact sufficiently fundamental to avoid the contract under which the respondent was to grant the appellant a lease after November 7 1985. However, in the event that an appeal was successful, the judge assessed the appellant’s damages as the difference between thirty-five month’s rent and the sum stated in the agreement plus the legal costs incurred by it. The appellant appealed.
1. Neither party to this appeal was under any misapprehension as to the fact that there was in existence a contractual relationship between the respondent and Kenya Cold Storage which, in the contemplation of at least one of those parties, and also in the contemplation of the appellant, was due to terminate on November 7, 1975.
2. The mistake made by the appellant and the respondent was as to the effect of a public statute, namely, the effect that the Landlord & Tenant (Shops, Hotels & Catering Establishments) Act (cap 301) would have on their agreement. As a general rule, relief will not be granted on the ground of mistake if the mistake is one of law as distinguished from a mistake of fact.
3. As the mistake was one of law, the contract between the parties was not avoided and it subsisted at the time of the action and the appellant was entitled to relief for breach or failure to complete on the part of the respondent.
4. The appellant was not entitled to the difference between the rent paid and the rent for thirty-five months because that cannot be said to have reasonably been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it.
5. The damages to which the appellant was entitled was a refund of the rent paid to the respondent, its advocate’s costs and nominal damages of Shs 2,000 for the respondent’s involuntary breach of the agreement with it.
1. African Universal Merchandise Ltd v Kulia Investment Ltd Civil Appeal 8 of 1980
2. Soper v Arnold (1887) 37 Ch D 96
3. Rogers v Ingham (1876) 3 Ch D 351
4. Bridland v Shapter 8 LJ Ex 246
5. Re Negus (1895) 1 Ch 73
6. Bell v Lever Bros  AC 1
7. Marshall v Berridge (1881) 19 Ch D 233
8. Nicholson and Venn v Smith Marriott (1947) 177 LT 189
9. J W Cafes Ltd v Brownlow Trust Ltd  1 All ER 894
10. Flureau v Thornhill (1776) 96 ER 635
11. Lock v Furze  LR 1 CP 441
12. Bain v Fothergill  LR 7
13. Wroth v Tyler  1 All ER 897;  2 WLR 405;  1 Ch 30
14. Day v Singleton  2 Ch 320
15. Hadley v Baxendale (1854) 9 Exch 341
16. Solle v Butcher  2 All ER 1107;  1 KB 671
17. Hanslip v Padwick (1850) 5 Ex 615
18. Hollington Brothers v Rhodes  2 All ER 578
1. James J.S. (1971) Stroud’s Judicial Dictionary of Words & Phrases
London: Sweet & Maxwell 4th Edn
2. Burke J. (1977) Jowitt’s Dictionary of English Law London: Sweet &
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3. Saunders, J.B. (Ed) (1969) Words and Phrases Legally Defined
London:Butterworths 2nd Edn p 174
4. Hailsham, Lord et al. (Eds) (1979) Halsbury’s Laws of England, London:
Butterworths 3rd Edn Vol XXVI para 1656
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Maxwell 23rd Edn Vol I pg 95 & 96
6. McGregor, H. (1972) McGregor on Damages London:Sweet & Maxwell
7. Black, H.C. (1979) Black’s Law Dictionary St Paul Minnesota: West
Publishing 5th Edn pp 800, 1313
1. Landlord and Tenant (Shops, Hotels and Catering Establishments) Act
(cap 301) section 2(1)
2. Rent Restriction Act 1920 [UK]
3. Rent Restriction Act 1939 [UK]
3. Judicature Act (cap 8) section 3(1)
Mr. Esmail for the Appellant
Mr. Wamae for the Respondent