Plaza Trust Limited v Hardrock Café Limited,Edwin Ochieng Yinda & Joshua Kulei [2015] KEHC 1809 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL CASE NO. 1719 OF 1999

PLAZA TRUST LIMITED ………….………....…………………. PLAINTIFF

VERSUS

HARDROCK CAFÉ LIMITED ……..……..………………. 1ST DEFENDANT

EDWIN OCHIENG YINDA ………...……………….…….. 2ND DEFENDANT

JOSHUA KULEI …………………………….….…..……… 3RD DEFENDANT

JUDGMENT

The plaintiff via a plaint re-amended on 28th September 2007 sued the defendants jointly and severally for Kshs.6,095,538. 80 with interest compounded at 24% per annum from the date of filing the suit until payment in full. Kshs.3,413,189. 00 with interest at 12 % from 20th September 2001 until payment in full. Kshs.319. 189. 00 and cost of suit. The plaintiff is the owner of Barclays Plaza and entitled to possession of the premises on mezzanine 2 and the restaurant gallery measuring approximately 12038 sq. ft. entered into a lease agreement with the 1st defendant dated 25th August 1993 for a period of 6 years from 1st September 1993. the 2nd and 3rd defendants guaranteed that the 1st defendant would duly pay the rents and observe and perform the covenants and other terms of the lease should the 1st defendant fail to do so. That the said lease expired by effluxion of time on 31st August 1999 yet the defendant remained in occupation of the said premises as a trespasser until 16th March 2000 when the plaintiff recovered possession following execution of the preliminary decree issued by this court on 10th March 2000. That clause 4(f) and (s) of the lease the 1st defendant was required at the expiration of the lease to redecorate the premises in a good workmanlike manner with appropriate materials of good quality to the satisfaction of the plaintiff. However, the 1st defendant refused or failed to carry out any restoration of the premises forcing the plaintiff to undertake restoration of the premises and as a result incurred loss and damage and particularized the same as under schedule A. The plaintiff therefore claims Kshs. 2,426,505. 90 from the defendants jointly and severally. That prior to the expiration of the lease the rent was Kshs. 300,000/- with a provisional service charge of Kshs.165,513/- per month with effect from 1st September 1999 the provisional service charge for the premises was Kshs.224,147. 54. That the plaintiff claims from the defendants jointly and severally for Kshs.2,100,000/- as mense profit for the period of 21st September 1999. In total the plaintiff claims as against the defendants Kshs.6. 095,538. 80 and a further  sum of Kshs. 3,732,296. 20 against the second and Third defendants being the decretal sum for rent arrears and cost in HCCC 96 of 2000 (Nyeri) adding that despite demands the defendants have failed to settle the plaintiff’s claim.

The 1st defendant admits the expiry of lease by effluxion of time but denies remaining in occupation of the said premises as a trespasser. That before and during the currency of the lease it sought and obtained consent of the plaintiff to renovate and develop the suit premises at a cost of Kshs. 30 million. That at the time of seeking the said approval consent to renovate and develop was represented to the 1st defendant by the plaintiff’s agents Lloyd Masika Ltd that a new lease would be granted. That the plaintiff claims for mense profits does not disclose a reasonable cause of action against it. The plaintiff’s prayer (b) with interest at 24% per annum in the amended plaint is illegal exaggerated and nonexistent. The defendant further raises a counter claim as follows;  That upon the issuance of a preliminary decree by this court for the plaintiff’s eviction from the suit premises, the plaintiff immediately embarked on removing its equipment of which were relocated to Express Kenya warehouse. However, the plaintiff through its agent Gimco later on refused the 1st defendant from removing it equipment that was lying in the suit premises unless it deposited with it Kshs. 5 million for restoring the suit premises to its original position. In paragraph 11 it particularized items left in possession of the plaintiff and the cost all of which it estimated totaled to Kshs. 16,743,283/- and the plaintiff only managed to salvage  Kshs. 550,000/- from the sale of the item kept in Express Kenya warehouse. That the plaintiff during the currency of the subject lease while seeking authority to renovate the suit premises. The 1st defendant agents Lloyd Masika the 2nd defendant herein a renewal clause on the basis that the plaintiff intended to invest Kshs. 30 million in rebuilding the suit premises that a further lease would be granted to the plaintiff upon the expiry of the subject lease that at the time of making such representation the 1st defendant said agents intended that they ought to have known that the plaintiff would rely thereon and would be induced thereby to invest the aforesaid sum of Kshs. 30 million in the suit premises. That in the premise the 1st defendant and its agents were under a  duty of care in making the said representation to the plaintiff. That on acting on the faith of the said representation and having been induced thereby, the plaintiff invested the sum of Kshs. 30 million in the suit premises on permanent fixtures and décor. That in breach of the duty owed to the plaintiff, 1st and 2nd defendants and its agents were jointly and severally liable for negligence in making the said representations.

They particularized the misrepresentations as follows;

Approving and consenting to the plaintiff to rebuild, refurbish and renovate the suit premises, knowing well that they would not extend the subject lease beyond 31st august 1999. That in trust and fact, the said representations were false, untrue and misleading. That in consequences of the matter the plaintiff lost millions of shillings and lost the benefits of the said investment and thereby suffered loss and damages for which it claims general damages. The plaintiff has also suffered loss and damages for which it claims general damages and quantified its losses of Kshs. 76,193,283. 00. Invested amount in the suit premises Kshs. 60,000,000/. Items detained by the plaintiff and never accounted for Kshs. 16,743,283. 00. Reasons whereof the plaintiff/defendant  prays for judgment as against the 1st and 2nd defendant jointly and severally for Kshs. 76,193,283/- general damages for negligent misrepresentation and cost of suit and interest.

This matter was partially heard before Justice Dulu . PW1, James Kiragu trading as Kiragu and Mwangi Ltd testified that he worked at Lloyd Masika up to March 1999 and at the time he was in charge of the management of the plaintiff’s premises “Barclays Plaza” located on Loita Street. That the plaintiff had rent out its premises to the 1st defendant Hardrock Café Ltd and the terms of lease were reduced into writing and the same was accepted with an optional renewal of 6 years. The lease was reduced into formal lease dated 25/8/98. That the lease was for 6 years from 1st September 1993 and the same was executed by the director and secretary and guaranteed by two guarantors who appended their signature in presence of an advocate. He testified that through the letter dated 20/5/1993 referred to the tenancy but the issue of period of lease was not raised again adding that his letter dated 31/5/93 in reply to the above letter did not make any representation on renewal was made. That he was the one who negotiated the lease with Mr. Yinda and he visited the directors of Hardrock before he leased them the premises. He added that the board could refuse to offer a renewal if on their assessment the quality of the café was not up to standards. That they could not be able to assess the amount of investment invested there or the kind of café they were going to put but relied on the presentations they made and what they saw in Mombasa is what they relied on when making their recommendations to the landlord. Approval was what was to be put up in the premises at Nairobi. The presentation was approved by the architects and management. He acknowledged that what was put there was a significant investment. That the lease provided that the tenant vacates after 6 years. However upon expiry of the lease the tenant violated all obligations under the lease would be entitle to a new lease upon application and that the same would have been considered however at the expiry of the lease the tenant was in arrears and as such the landlord would not consider extension. That at the expiry of the said lease he was not aware that there was any application for extension of lease. That all fixtures put could be removed.

PW2,Julius Kibwage testified that he is an architect by profession for over 26 years and working with Triad Architects.  He stated that he knew the plaintiff as the owner of Barclays Plaza on Loita Street and the defendant who was a tenant in the said building.  He testified that Triad was the architect for Barclays Plaza and that he had been involved in the project from 1988 when he designed the concepts and supervised the building up to when it was completed in 1992. He testified that he was involved in the tenancy between the plaintiff and 1st defendant as they would inspect what the client was doing and was personally involved when the client was renovating to construct Hardrock Café Ltd and though he couldn’t recall the actual date he placed the time to be around 1993. That the tenant after obtaining possession of the premises and upon completion of the lease formalities made the necessary renovations. Later on he was informed by the landlord that the tenant was unable to make repairs and renovations and return the premises to the required standards and he instructed them to give schedule work required to be done on the property to restore it to the required status. That they prepared a scope of works given to contractors and Maridadi Building Contracts were given the works. The said scope of work guided them on the works to be done.  That they undertook the works and were done between May of 2001 and July 2001. At the end of the works, the works was inspected by them and client and he agreed that the scope of works was completed by the contractor. The scope of works is captured on page 50 and that all parties involved signed an agreement.  The value of works done was 2,426,505/98 and he as the project director signed. Payments were made to Maridadi as per the receipt dated 20/12/01. They subsequently issued their final certificate to Maridadi so that they could be paid by the client. That there was a six month’s period given to any defects arising. Upon paying them Maridadi issued Barclays Plaza with an invoice for payments.

On cross examination by Mr. Sumba for the defendants he testified that he was the project architect and had generated the documents with his assistant.  That Maridadi had been contracted by Plaza Ltd to commence the restoration works to bring back the premises to the status required. That they prepared the scope of works did the tenders and Maridadi won the contract and were contracted as they had the best price and were pre-selected for their capacity. That in the contract document there were items not done and so that was omitted and if the value was less it is deducted. A final account is a document captured at the end of the contract.

He took the court through various payments where differences arose as most was an increase and not a decrease.

On re-examination he gave the total of all the omissions adding that the additions of itemized works of Kshs. 3,108,922. 50 and preliminary items of Kshs. 50,000/- was added to this gave Kshs.3,608,922. 50. He sought to clarify that the preliminaries costs were the contractors various costs of managing the site. E.g. mobilizing to the site his management cost, costs of doing hoarding to keep off passersby by, costs of insurance e.t.c. that the total sum before VAT came to Kshs. 2,056,361/- before VAT  and came to Kshs. 2,426,505. 60 on adding VAT.

PW3,Lucy Wangai Githinji, an employee with Standard Chartered Bank, property department testified that she took care of the property owned by employer. Between 1992 to 2000 she was working with the firm of Lloyd Masika Ltd. as a property manager and took care of various properties amongst them was the Plaintiff’s property Plaza Trust Ltd. She testified that she was familiar with the lease entered into between the plaintiff and the defendant for a term of six years from 1st September 1993 to 31/8/1999. However, at the expiration of the lease the tenant didn’t vacate but remained in the premises that they pursued the matter in court and a court order was granted in 2000 March allowing them to take possession. That normally they instructed the security guards that if any tenant wanted to move out any of their assets and equipment they would draw up a gate pass, stamp it and sign if for authority and on presenting it to the guard, they would verify what was moving out.  The copy would be left with the guard and they would periodically receive them and we would keep a copy and the security company too. This was evidenced by the gate pass issued by the Hard rock Management which showed that the music equipment, computer and PABX, cleaning equipment, scrubbing machines, table cloths and napkins, telephone head sets and branded T-shirts, fax machine and consumables,  cash register, framed jackets, decoder and amplifier had been moved out. That a letter from Whitestone Auctioneers (K) Ltd. addressed to the advocate of the 1st defendant and told them the proceeds of the sale. That the eviction order was on the 10/3/2000 and received on the 16/3/00 and the letter dated 15/3/00 gave a schedule of the items listed for public auction further a letter from Equity Recovery Services Ltd addressed to Sifuna acknowledges a sale by public auction of goods recovered from Hardrock Ltd. The defendant had instructed auctioneers and they preceded to advertisement the same.  That following the said sale the value of salvaged items was only Kshs. 194,000/-hence the decree for Kshs. 3. 4 million wasn’t satisfied.

On cross examination by Mr. Sumba she testified that she worked with her previous employer from 1992 to 2006 but for this account it was up to 2000. That the lease was negotiated by her employer and the 1st defendant and she was privy to the things recorded in the letter and lease. That the lease was from September 1993 to August of 1999 for a period of six years and the same expressly stated that there was no options for renewal and no negotiations were held to review the same. She affirmed that the lease expired on the 30/8/99 but no new term was offered. She denied knowledge of the investment by the 1st defendant on the said bar and restaurant business.  She testified that the tenant fitted a floor, ceiling, painted the wall and they fitted a kitchen all which she claims cannot be defined as permanent as only the building was permanent. That the restaurant continued to operate after expiration of the lease in 30/8/99 until they obtained orders of repossession. That the tenants could remove anything if they wanted and required no permission from them. That since there was a deposit they could have demanded a deposit to return the property to how it was before and it was wrong to claim that the goods were held over arrears as alleged.

On re-examination she stated that the plaintiff filed suit after the 1st day of expiry of the lease and required possession to be handed over but Hardrock remained a trespasser after the 31/8/99.

PW4, David Henry Otieno testified that he worked with Barclays Bank of Kenya as a Safety health and Environmental Manager and he had been nominated by Barclays Bank Staff Pension Scheme as an alternative director of Plaza Trust Ltd by the plaintiff.  That he had been involved in the management of the plaintiff’s properties specifically Barclays Bank property along Loita Street and was familiar with the defendants who were signatories to the said lease. He testified that the tenant was Hardrock Café ltd, the 1st defendant while the 2nd and 3rd defendants were the tenants’ guarantors under the lease the landlord was Plaza Trust. He gave an over view of the said lease and stated that the property at the time was being managed by Lloyd Masika. That the landlord was Plaza Trust Ltd and the tenant and the guarantors entered into a lease which set out the term was six years and all other terms were set out in the said lease. He testified that all the signatories had signed. The letter from the defendants to the plaintiff’s managing agents seeks a 6 year lease but as evidenced via a letter dated 20/5/92 the same was not offered nor reviewed. That the term of lease was 6 years from 1st September 1993 and the initial rent was Kshs. 300,000/- with a service charge of 162,513 which was a provisional charge. That the reconciliation account set out the rent as at March 1998 plus the service charge and confirmed that that was the position as at March 1998. That the plaintiff hadn’t paid all the rent and service charge and the plaintiff distressed for rent and service charge but the defendant failed to pay the amount. The defendant filed suit against the plaintiff but the same was dismissed and the plaintiff had made a counter claim for Kshs. 3,413,107. 20 plus costs. The plaintiff tried to attach the defendant’s goods but was not able to recover the sums. That though the lease came to end on the 31/8/99 the defendant did not hand over possession and this necessitated the plaintiff to file this suit on the 1/9/99 and the court issued a preliminary decree on 10/3/00 and after the execution of that decree the premises was recovered.  However before the decree the 1st defendant had begun removing some of its goods from the premises and though there was a pink Cadillac at the ceiling the plaintiff was not able to sell the vehicle as it was not in running order and no one traded for it the same was collected and is still stored at Maridadi go down to-date. That the defendant did not carry out the obligations between 31/8/99 and 10/3/00 and prior to the expiry they hadn’t restored the premises as required and the plaintiff took upon it to restore the premises on its own. It instructed its architects to prepare a quotation for the restoration. Maridadi Building Contractors carried out the works at a cost of Kshs. 2,426,505/98 and it paid it after it received its final account and the plaintiff paid it. That some items salvaged from the premises were stored at Maridadi and Gailey & Roberts go downs and a report on the same was done by Tysons valuing the items at Kshs. 62,200/-. That at that time the property was being managed by Gimco Ltd  who took inventory and that the plaintiff paid some of the salvaged items were valued at Kshs. 30,000/-. That the 2nd and 3rd defendants were guarantors having executed the lease before advocates of their choice and that the two guarantors did not pay nor fulfill their obligations under the lease. That the lease provided for interest for money not paid. That the base rate as at 28/9/99 was 21% that plus 3% interest gave the interest at 24% and that is the amount the plaintiff is claiming from the defendant as stated in the plaintiff’s re-amended plaint dated 28/9/07.  He testified that there was no representation that the lease could be reviewed and the lease was on the entire understanding of the parties. That the plaintiff was not involved in the cost of the defendant’s renovation as it was not the plaintiff’s duty renovate. He added that there were no documents from the defendant giving the said values from the defendant and he had been involved in the management of premises.  That when a tenant takes over a premises the property depreciates by some percentage and the plaintiff did not accept the said values nor the amounts claimed by the defendant in the counterclaim as stated in its amended defence dated 9/7/05. He denied that the defendant lost an investment of over 60 million and could not comprehend where the defendants’ got a figure of 16,743,283/- as the plaintiff did not owe the defendant any money. He added that the deposit of Kshs. 950,000/- would have been refunded if the defendant had vacate and restored the premises to required status and the same would reduce the total decree. He urged the court to award the plaintiff the amount in the plaint plus costs and interest.

On cross examination by Mr. Sumba, he stated that they retained Kshs. 950,000/- and it was not wise to give credit to it as the same was given at conclusion adding that at the determination of the case the same would be reduced if their prayers are granted adding that no interest extended to the Kshs. 950,000/- as per the terms agreed on. That the defendant’s decision to invest and having accepted the terms of the lease and they did not get involved unless there they breached the lease. That the defendants could renovate the premises as they wished but at the end of the lease they were to restore it to the original position. The tenant was given the space and the tenant put its things in the space and at the end he gave the 4 walls as he was given and by putting permanent fixtures they did so at their own risk. That the renewal was declined as the lease did not allow it and the renewal of the leases were not granted automatically as each case was considered independently. That the 1st defendant did not approach them with a suggestion about renewal and he found it strange that they challenged the suit to vacate possession and denied participating in any renewal negotiations for the lease. That the agents report to him and he reports to the Board of Trustees.  They had their documents in their records. They had passes and security people there too and it was the landlord and its agents who verified what left adding that the defendant was yet to go for his Cadillac vehicle despite knowing where it was.  That when the Cadillac was taken to their premises it was not functional but was a decorative item. That the defendants frustrated the removal of the furniture and took it upon themselves to remove the items that they wanted and they hoped they would remove the goods and only went to court to get the premises after they instructed the auctioneers to sell the goods which was done at the same time the case was filed. That the 1st defendant claims that the items detained were worth more and that it was at liberty to collect the items by paying the amount owing at the time. That they hoped it would pay and collect its items but the tenant opted to ignore and abandon the items which are still of no value to the landlord.

PW5, Gailey Singh testified that he was a registered building contractor under class ‘B’ with the Ministry of Works and was contracted to do the work at the Plaza by the architects. He testified that he was the principal shareholder of Maridadi Building Contractors Ltd and was paid a sum of Kshs. 2,426,505. 98. and issued a receipt for amount received. That the Cadillac was floating in the air having been suspended from the ceiling and now the same was at his store on Chiromo Road, Westlands where it had been laying since then and the rest was scrap that was removed from there.

On cross examination by Mr. Opiyo stated that he got authority to do the works from the plaintiff and the architects Triad Architects and although Hardrock had leased the property he had no interactions with them during the said period but did not invoice them with any bills as they had been invited by Barclays. That they had no space to put it up and that later they gave instructions verbal instructions that he takes it to his store and stated that he had no instructions from the client to raise a fee note for storage charges.  He testified that he was fully paid for the renovation and auctioning the vehicle. He stated that he did not have an ignition key to the vehicle and they had to tow it away as it was not in running condition adding that they did not attempt to put a battery to start it. He denied knowledge that the defendant had asked about the vehicle adding that the sofas which had been built in had to be dismantled during removal and the same were taken away and that the caretaker had a list which was with the caretaker but could not recall the market value of the goods and that he was informed that Barclays had detained goods but they didn’t get back to him and that he held on to the vehicle whilst awaiting their response.

DEFENCE CASE

DW1, Nicholas Sumba relied on his statement dated 14/1/14. He testified that the plaintiff’s counsel had written letters and only mentioned the Cadillac a bit and there were more items than the ones listed. That it took almost 3 years to locate the items. He referred to the letter dated 23/7/04 between the 1st defendant’s advocate with Mr. Wairora in regards to the goods that were to be collected that he wrote the letter dated 7/9/2004 advising his client to the items the plaintiff was releasing as failure would subject them to storage charges. That the plaintiff released some of the items and as they could not do anything with them they asked Whitestone Auctioneers to auction them where there were. Via the letter dated 15/8/2002 the plaintiff’s advocates complained about a proclamation on items they had obtained and demanded that they proceed to execute their decree which confirms they had items they kept all along. He referred the court to the proclamation by Garam Investments. When the plaintiff was granted vacant possession in the year 2000, the 1st defendant obliged, and they moved with speed to remove all the items in the hotel for safe keeping which removal took 1 to 2 days and when it came to the third day, the plaintiff denied them from taking any more items.  That there was a provision to restore the premises to its original position so they closed the premises the plaintiff said they were securing the other items to be taken as security for restoring the premises to its original position and as such there was no way one would remove an item from the premises without the plaintiff’s authority. That by virtue of the counterclaim the defendants have made they would have come out and say what was there. That there was a big loss and the items were removed with the situation as it were and most were sold at lower prices because there were storage charges and the 1st defendant only recovered Kshs. 55,000/- due to the urgency of disposing the items to avoid facing more losses.

On cross examination by Mr. Gachuhi for the plaintiff. He testified that he was physically present when the items were being made and supervised their removal in the 2nd day. He denied having removed the most valuable items 1st as Express Kenya the firm they contracted to manage the removal of the items had a way of removing the items and there were issues of the vehicle and the storage place and that they had no obligation to inform the plaintiff of the items that were remaining as one could remove items from the place without the plaintiff’s authority. He adduced the gate pass signed by Mr. Owiti the security manager and the same bore the plaintiff’s stamp but could not vouch for the crest Hard rock Café Ltd. belonging to Hardrock. He admitted that he did not give Florence nor the plaintiff a list of what they took but added that that did not mean there was no way of knowing what they gave. He further added that there was evidence of value of the items, items security statement and he sought to adduce a list dated 3/1/94 from Shankar Electronics Ltd. which shows what was paid for the data beat machine. That they were asked to audit the items which were along Mombasa road which they collected and supervised their auctioneering but could not recall doing any inventory before the auctioning. That some of the items were sold to individuals while others were stored at Express prior to the sale and the money was paid to the 1st defendant but he did not pay the monies to the plaintiff. In regards to the Cadillac the 1st defendant was asked to collect it but did not do so as there was no evidence he would not be liable to the storage charges.

He testified that in 2000 there was a decree in favour of the plaintiff against the 1st defendant and the same had to be executed in any manner but it did not amount to detaining items. That they had talked and reached a conclusion that the Cadillac though proclaimed under case No. 96/2000 was not sold at any auction by virtue of the representations made by the plaintiff.  That on 27/6/02 they were requested to collect the items save for the Cadillac and his client was told he would be responsible for the storage charges and that though his client was agreeable to receiving the items to be released he had to bear in mind that the same formed the basis of the counterclaim. That they wanted the items itemized. That they got in touch with Gimco and discussed the matter and made arrangements to collect the goods by 31/8/04 however the items were never collected and were auctioned where they were at the storage Gimco had kept them and that he attended the said auction held on 11/11/04 as evidenced by the letter dated 3/12/04 by Whitestone Auctioneers. That they received the money from the auction sale as disclosed in their counter claim. He denied that the only thing remaining of value was the Cadillac as there was no document from them listing the items they had collected. That Gimco’s letter dated 17/1/05 showed that all the things they stored were sold and the 1st defendant’s counter claim has list of the missing items. That they asked to collect the vehicle from Maridadi on 21/4/ 2005 as advised by the plaintiff via their letter dated 9/5/05. However there was a caveat not to collect the vehicle and he could not write to them and ask about the storage charges and that the court was to determine the issue of storage. That he took instructions from his client and negotiated the issue of items whilst the matter was pending in court and that he knew that the issue of storage was going to be a factor. He did not understand why the plaintiff was holding the vehicle in the first place but he did not collect it. He referred the court to the letter dated 7/9/04 informing his client that there could be storage charges and he subsequently wrote to ask how much the charges were from 2004 though he did not understand why the same was coming up. He testified that the vehicle was valuable yet he took no action to get it because of the issue of the storage charges and that there was a caveat that provided that the vehicle was not to be collected on any condition. That the plaintiff’s condition was payment of the storage charges but the same had not been agreed upon.

On re-examination he stated that his client was not a party to the place the vehicle was to be taken and the condition to the storage charges and that he was not advised by the plaintiff on the state in which the vehicle was stored nor if the person had a storage facility that expected him to charge storage charges. That though the vehicle was proclaimed for sale there was no valuation report annexed to the proclamation. That the proclamation report gave the value as 10,000/-. It was his testimony that it was a collector’s item in running condition with a key fixed to it and had its 4tyres and even at the value of Kshs.10,000/- no one bought it. He insisted that when the vehicle was at Hardrock Ltd it was in a running condition. He testified that the items auctioned were done at Gimco’s yard but he could not tell how the same got there as he was not involved at the time of their movement and did not know the inventory of the items moved.  That those were not all Hardrock’s items and apparently some were left behind as per the 1st defendant. He sought to adduce a list of items which placed their value at Kshs. 16,743,283/- adding that the same had not been accounted for to-date.

He referred the court to the letter dated 17/1/05 between them and Gimco adding that after tracing that the defendant’s items stored at their warehouse at Mombasa Road and he also personally went to Maridadi.  That they filed a counter claim on the 9th June 2005. That on receipt of their letter dated 17/1/05, Whitestone Auctioneers released Kshs. 105,200/- to them and a fee note of Kshs. 70,258/- which they paid.  That from the said sale only Kshs. 195,460/- was realized and most of the money going to administration purposes. He testified that there was recording of the items when they were removed from the Plaza from the gate pass further that part of inventory of the items held belonging to the 1st defendant was at the exit part of the building at the security desk so that once the items left the premises it would be difficult to get the inventory.  That the inventory was as per the list in the plaintiff’s documents and that the documents were done by the management at the Plaza.

DW2, James Mwangi Gatemu sought to rely on his statements dated 20th September 2013 and the same was adopted by the court. James Mwangi Gatemi, an employee of the respondent in position of General Manager testified that he worked for the defendant between August 1993 and March 1998. In the prestigious restaurant and bar on mezzanine2/3 floor of Barclays Bank building. He testified that there were various communications between the plaintiffs and defendant regarding renewal of the lease. He estimated the defendants investment to be around Kshs. 80 million as it had a potential to generate over Kshs. 100 million each year. That the items detained by the plaintiff were in excess of Kshs. 60 million and way above the amount claimed by the plaintiff adding that the defendant only managed to gain access of the premises  in September 2004 almost 5 years later. He stated that the 1st defendant had already paid Kshs. 750,000/- which was equivalent to 3 months’ rent and the same had been. That the plaintiff damaged and destroyed the 1st defendants documents and assets during the closure of the premises. He estimated the value of the Cadillac between $14,000 and$18000 adding that it was a misrepresentation that the said vehicle had no bidders. That the proclamation was fraudulent and calculated to create further loss to the 1st defendant.

On cross examination by Mr. Gachuhi for the plaintiff. He denied ever being a director or shareholder of the 1st defendant but claims to have represented them in all aspects of the project. He testified that he was neither a party to the said lease agreement nor having signed it. He testified that the plaintiff and defendant had a lease and at the time he was a general manager of the project adding that the execution of the documents was only done by the directors. He stated that the lease was for a term of 6 years and added that there was no mention of renewal or review. That prior to this case the defendant Hardrock Café Ltd had sued Plaza Trust Ltd and Lloyd Masika Ltd but they lost the case when the court ordered the defendants to deliver possession. He however claims not to know of the preliminary decree. He stated that the defendants were worth Kshs. 80 million though he did not rely on the valuation as their audited accounts did not form part of their documents. Though he claimed to be with the defendant between 1993 to 1998 March.

He testified that from the documents the property was not recovered and the agents closed the business on the last day of the lease illegally adding that the plaintiff had been in possession of the premises and could not clearly state the date when possession was taken.  That the decree was obtained on 20th January 2000 at this time he was not working for the defendant. He testified that the premises were not operational on that day and when he went to the premises he could not get access however stated that h was not at the premises at the time of the closure of the premises.  It was his opinion the defendants were mistreated. He testified that he was there when the Cadillac was driven in and it was placed above the bar in Mezzanine 2 hanging from the ceiling above the bar. That as per the documentation there were no bidders for the said vehicle.

He testified that he was the general manager of the café which was the project.  That he attended the meeting and liaised with the architect during the building and also paid the certificates. I was the one in charge of the project and had full knowledge of the terms. He added that the plaintiff did not object to my participation during the negotiation.  There was various communications and to his understanding of the lease at the conclusion of the lease was that the 2 floors would be designated to a restaurant for a term of 6 years. He added that when the building was constructed the 2 floors were in the process as a restaurant and that is why they took interest and were eh 1st occupants. That their understanding of the lease was that at the end they would negotiate and to him there is no lease to his understanding that there was no lease that could not be renewed.

He sought to adduce a list of document listing assorted goods sold by Equity recovery Service Ltd. The proclamation by Guram Investments and payment receipts of payments made by the defendants to Express Kenya Ltd. That the 1st defendant’s additional list of documents dated 20/9/13.  He pointed out that there was the notification of sale of moveable property the page No. 4-6 and communication between Nicholas Sumba and Guram and Kaplan & Stratton pages 1 – 3 and finally bundles of 2/4/13 No. 1-6 setting up the Hardrock Café. He testified that he was engaged in re-negotiations of the lease and that at that time they were already in court over the lockage of the premises and litigation also ensued on the issue of repairs. That he continued being involved as he was friends with the owners and they wanted to know what would happen to the project. He went to look for the documents which he could not find as they had to go back to the suppliers. He stated that an inventory of the item wasn’t taken when the lease expired on the last day and that’s when the doors were closed by the agents of the landlord. At the time everything was inside when the lease ended and there was no formal handing over.  He further added that the Cadillac was driven in and had a running engine and that it used to be started but remained hanging. He acknowledges that the said vehicle had no bidders adding that that the said car was a classic and could not tell its whereabouts adding that only 145 were ever made in the world.

DW3 Edwin Ochieng Yinda, testified that he was one of the owners of Hardrock Cafe. He sought to adopt his statement dated 13th September 2013 admitted into evidence. He testified that he entered into a business relationship with the plaintiff and that he was a party to the lease and had signed the same. That he took into account the renewal of the lease. He testified that the parties had quite a number of meetings with the plaintiff and agent Lloyd Masika during which the discussions the issue of renewal of lease came up and they were convinced they would be signing a general lease.  He was adamant in the beginning to proceed with the lease because the investment they put in the business was very high and if they weren’t going to get a renewal there was no way they would be able to recover the investment. However at this juncture the plaintiff and his representative convinced him during their discussion that they could not see a situation where the renewal of lease would be denied and that in any case the general lease document also covered that adequately bearing in mind that they were dealing with Barclays which was a blue chip company, they didn’t believe that it would deny them the renewal of the lease.

Interestingly at that time the 1st defendant was the only single large business in the building and had their intention to renew the lease through their agents towards the end of the six year lease.  That there was a general indication that the lease would be renewed and there would be no problem and he couldn’t recall if the plaintiff gave Hardrock any express notice that it would not renew the lease despite the numerous correspondences between them. That Joshua Kulei enjoined in the suit as he was a guarantor and they didn’t sign as guarantors other than the lease document adducing that at no time was he addressed as a guarantor in regards to any breach of the lease, the plaintiff didn’t give them a statement of account asking them to meet it as guarantors on behalf of Hardrock Café. That Hardrock was not declared bankrupt or declared insolvent under any law but it is currently not operating as it had been wound up. That at the time they were negotiating they attended meetings with one Mr. James Mwangi and had a counterclaim in their defence and relied on the documents Mwangi spoke on contained in the 1st defendant’s final list of documents pages 1 – 52 dated 1st April 2014 and the additional list dated 16/9/2013. He acknowledges that the plaintiff alleges that it took over possession pursuant to a decree in a case here he acknowledged knowing that but added that he was not a party. He testified that the Cadillac was the café’s main feature and was left there and without, it was not a restaurant. That it was intact and was driven from Mombasa into the building. According to their valuation it was valued at about 46000 dollars as evidenced by the report in the 1st defendants additional documents dated 16/9/2013 at page 42 where it is referred to as a 1962 Cadillac Eldorado Classic Car Price. That they are recorded and values are indicated. The car is a classic because of the year of build and the number it is built it is indicated.  The price becomes easy to determine as the same depends on the availability of the vehicle. The objective was to make the car the center of Hardrock and it was its main attraction.  It was a running car and had an ignition key permanently attached to it and in most of the mornings, the car would be started as they wanted the engine to function.

He testified that the plaintiff did not invite him to the auction bid of the said car and he had no idea where it was. That he would have been the first to bid for it since it was a car close to his heart. He further testified that there were quite a number of items that were left behind because of their hurried removal from the building. That the plaintiff later decided they couldn’t remove anything more until they recovered the costs of what they considered the demolition of the restaurant and so quite a number of their items were left and they were particularized by the company. That the result amount of the sold items was less than Kshs. 450,000/- and at the end of the day only about Kshs. 100,000/- was due to them. That the auctioneer took most of it for storage and fees.  The deposit paid by Hardrock Café was about Kshs. 750,000 and it the same has not been refunded to date. He sought the court to allow their counterclaim. It was his testimony that after the plaintiff unceremoniously removed them from Barclays Plaza he found the discussion difficult in view of the heavy investment they put into the building and the renovation we made which he placed at between Kshs. 76 to 80 million to about 100 million shillings. He claims he should have been allowed to sell the business as a going concern.

On cross examination by Mr. Gachuhi for the plaintiff he testified that he takes documents seriously and reads them. He admitted that he was given a copy of the lease and contractual obligation arose once they signed it.   He testified that he was mentioned as a guarantor in the letter dated 12/5/93 and were required to join in the lease and  that the term of lease was 6 years they accepted the terms and signed at the top and the bottom and correspondence to the same via their letter dated 20/5/93. He referred the court to part No. 5 which provided that, “This is accepted with optimal renewal for a further (6) years” that he wanted an individual in the lease. However via their letter dated 31/5/1997 they stated that they weren’t offering an option to renew.  Via their letter dated 31/5/93 they asked for a meeting with the plaintiff and the agent at this time the said lease had not been signed. Further that the plaintiff’s letter dated 7/9/93. It doesn’t state that there was an option to renew the lease. The said term reads “6 years from 1st September 1993. ”

While clause 8(c) reads “This lease …… provisions of this lease.” From the same it was not clear that the lease was for six years with no option to renew and there was no clear indication that they would be guaranteed a renew of the lease. He further referred the court to the 5th Schedule on “Rent and Rent Review”.  He argued that the same does not mention an option to renew. However rent reviews were from the 3rd and 5th years of the term and they could review rent on the 3rd year.  That the companies execute documents by way of a seal by Hardrock and the same was witnessed by his signature and by that of a company secretary. He referred the court to clause 7 on “The Guarantors Covenant”. He stated that he knew the case was ongoing but he was not notified as a guarantor.  At the time Hardrock was represented by Mr. Chacha while the plaintiff was represented by Mr. Sumba. He testified that he recalled the case as it had been initially filed in Nairobi but later transferred to Nyeri and the 1st defendant was a party and by then the restaurant was already closed. The Hardrock Casé was dismissed and judgment was entered for the defendant for Kshs. 3,413,107/20.  That he did not take any steps to pay the sum of Kshs. 319189/-. That though the lease was to expire on the 31/10/99 he however could not recall the rent in August 1999.

On further  cross examination by Mr. Gachuhi he stated that the High Court case Misc. 381/97 main contention was not the rent but they were also claiming from the plaintiffs and they had sought a declaration that there also seeking  a declaration that there were no rent arrears owing to the plaintiffs. The plaintiff’s suit was dismissed and 1st defendant got judgment of Kshs. 3,413,107/20 a sum he admits the company did not pay. That prior to the lease coming to an end they were in discussion of renewing the lease and they had a lot of verbal discussion with the firm of Lloyd Masika and the plaintiff.  That they filed the issues in contention and it was their opinion that the matter could have been resolved better after the court cases but the same was not documented.  He admitted that the 6 years came to an end in August 30th 1999 and they did not hand over the premises to the plaintiff they were still talking and the business was a going concern and was surprised that the plaint was filed on the 1/9/99 the next day. That they had already left the premises by September 1999 and only their stuff was in the premises and that they did not hand over the premises as meetings were still ongoing and the plaintiff had to get a court order to get possession as they remained in possession until March 2000. He admitted that they did not return the premises to the condition it was to be but insisted that they were not physically in the building though their things were locked in the building. He testified they began moving their things in earlier than March but could not remove some things. That they could however not remove some things. He however doesn’t recall them making an inventory.

He referred the court to Pages 19 to 22 on the letter from Express dated 15/3/00 to Hardrock Café adding that he did not have any other inventory apart from this which gives some of the things that they removed. He added that the items with Express were sold on the instructions of Sifuna & Sumba Advocates for Kshs. 79,543 and 18,000/-. The list was sold at Express and the list collected by Mr. Owiti and they were able to determine what was not removed from the building. That he had papers for the data beat machine adding that the same were not just quotations b8ut that the said machine had been delivered and referred the court to the quotation dated 7/6/1993. That though he could see the advert he wasn’t sure if the same was sold.  He testified that the Cadillac is estimated to be Kshs. 1. 3 million shillings but he had no valuation to support the same but he indicated that the same could be higher adding that they had been informed that the same had been paid for. That  Mr. Sumba was in charge with the people in regard to the Cadillac and there were storage charges being asked for but he did not pay the same. That  he was in contact with Mr. Sumba and he had instructed him to collect the vehicle.  That Mr. Sumba questioned the retainable of payment of the storage and that he would have collected the vehicle there was no need to pay the storage. The vehicle was removed from the ceiling and it was Mr. Sumba who knew when it was taken. That  though he committed to pay he did not collect the vehicle.   He stated that the plaintiff only recovered Kshs. 550,000/- but could not tell how they arrived at that figure adding that the same looks like a mistake.  All the items sold by Express were indicated adding that the figure they gave was wrong from the records they  have. He however could not adduce any documents to support his claim of the loss of Kshs. 60 million.

On re- examination by Mr. Owino he referred the court to the 1st defendant’s supplementary list filed on the 6/3/2013 specifically the letter date 8/8/04 the same demanded the release of the items and the letter explains why the Cadillac was being held. He added that he did not facilitate the vehicle being taken to a 3rd party to honor storage charges. That he saw the documents touching on Mr. Owiti and the plaintiff’s people signed them adding that not all the items collected by Mr. Owiti were not all owned by Hardrock. He however admits that there was no inventory at the time of removal of the goods as noted from Mr. Owiti’s documents. That at the time of leaving the plaintiff he had to authorized the removal of the items by them and the plaintiff and this suit was filed a day after we left the premises  prior to which no letter was sent asking for vacant possession nor a letter for termination. That there were negotiations and it was hoped that they could reach an agreement. That they were not given an opportunity to take out the items from the premises at the end of the tenancy as when they were vacating a lot of dogs were brought and they were completely mishandled. That the claim was based on what they invested and the equipment removed and stored at Express and others stored at the other auctioneers who sold the equipment.  i. e. Equity Recovery.

SUBMISSIONS

The plaintiff in its written submissions it raised the following issues;

As between the plaintiff and the first defendant

What was the period of the lease dated 25th August 1993 ?

Did the first defendant handover possession of the premises upon expiry of the lease?

If not in the plaintiff entitled to mense profits as prayed in the plaint?

Did the plaintiff recover possession of the premises pursuant to the execution proceedings on the preliminary decree issued in this suit?

Is the plaintiff entitled to the damages claimed for restoration of the plaintiff?

Is the 1st defendant’s claim on the allegations of misrepresentation time barred?

Is the 1st defendant entitled to the amounts pleaded in the counter claim?

Issues as between the plaintiff and the second and third defendant?

What are the obligations of the 2nd and 3rd defendants?

Did the 2nd and 3rd defendants vacate the suit premises on or before the expiry of the lease?

Settling the rent and service charge arrears set out in the decree and certificates of cost sin HCCC 96 of 2000?

Ensuring the premises were restored as provided for under the lease

Paying the damages, costs and interests to the plaintiff upon the first defendant’s default?

As against all the defendants jointly and severally;

Is the plaintiff entitled to judgment as prayed in the re-amended plaint?

Who should bear the costs of suit and counterclaim.

It was submitted that from the evidence before it is undisputed that the lease was for a period of 6 years including 1st September 1993 expiring on 30th August 1999 nor that the 2nd and 3rd defendants were guarantors of the 1st defendant. That the defendant remained in occupation as a trespasser from 1st September 1999 to 16th March 2000 when the eviction took place and the 2nd and 3rd defendants failed to ensure that the 1st defendant delivered the premises upon the expiry of the lease. Nor that the 1st defendant failed to pay rent in arrears or satisfy the decree issued in Nyeri HCCC 96 of 2000.

The plaintiff refutes the defendant’s claims that they cannot be enjoined in the matter stating that they were directors of the 1st defendant and are infact the ones who filed HCCC 96 at the Nyeri High Court. That the  default in question arises from a debt in the said lease adding that the defendants claim of not knowing the whereabouts of the attached is misguided as their witness testified that the dame were sold by the defendants’ advocates  but the money was never forwarded to the plaintiff to satisfy the decree. It added that the breaches in question arose during the pen dance of the lease and that the 2nd and 3rd defendants were enjoinder on 27th May 2002 within the 6 year limitation. That the 3rd defendant confirmed that he was aware of the decree against the 1st defendant.

In regards to the defendant’s counter claim that some of its items were left in the plaintiff’s possession, the plaintiff submitted that the defendant’s witness DW2, in his testimony disclosed that the 1st defendant had removed items from the premises which were sold on their behalf by Whitestone Auctioneers (K) Ltd and Equity Recovery services and the defendants doing not make any effort to settle the decretal sum. That the defendant’s decision to invest was personal and it should not be blamed on it. That the defendants counterclaim is on misrepresentation which is a tort and that the same is time barred. That it is not disputed that the Cadillac was ornamental piece attached from the ceiling of the premises and that the plaintiff gave evidence that no bids were offered for it and for the defendants to claim that the same was valued at Kshs.1,364,000/- was not supported by any evidence ,it was submitted that the Cadillac has always been available for collection by the defendants from Mr. Gailey Singh warehouse adding that this court has jurisdiction to give effect to the lien that the plaintiff and its agents hold over the Cadillac. The plaintiff urged the court to order the defendants to pay storage fees of Kshs. 20,000/- per month until collection or disposal.

The plaintiff submitted that its claims for interest at 24% per annum as defined in the lease compounded monthly for the sum of Kshs. 6,095,538. 80.  which he tabulated as follows;

Restoration charges 2, 426,505. 90

Rent as mense profits Kshs. 2,100,000. 00

Service Charge Kshs. 1,569,032. 90

Total Kshs. 6,095,032. 80

and a contractual interest of 3 % per year above the above base rate It was its submission that the plaintiff had proved its case against the defendants jointly and severally and prays for judgment as set out in the re-amended plaint and that the 1st defendant’s claim be dismissed with costs.

That mense profits are damages or compensation recoverable from a person who has been in wrongful possession of immoveable property and is liable to the rightful owner for that period and that the same are assessed by the rents that plaintiff was denied and costs incurred.

The defendants submitted that the plaintiff’s claims for mense profits against them cannot arise when the termination of lease was illegal. That the claim of Kshs. 3,732,296. 20 decree from Nyeri HCCC No. 96 of 2000 cannot stand when the plaintiff proclaimed and attached the 1st defendant’s assets part of which to-date have never be released to the itself and wonders how again they can claim the decretal sum from which they had attached and or detained the 1st defendant’s assets of which they have never been accounted for is not understandable. That the 2nd and 3rd defendant cannot be enjoined and held liable jointly or severally in this suit principally on the grounds that; they cannot be enjoined at execution stage part of the claim having been entered in Nyeri HCCC No. 96 of 2000 when they were not parties to the suit and asking them what was the subject to a decree of an already determined court matter is tantamount to condemning and the 2nd and 3rd defendants were not supposed to be given a hearing. That the claim the 2nd and 3rd were enjoined pertains to this suit and not the previous suit. That the suit against the 2nd and 3rd defendants is bad in law since judgment has already been entered in part of the prayers sought and that prejudice will be caused to them since they have been made parties to a suit that has been partly determined with them being given an opportunity to be heard. That though they were guarantors of the 1st defendant as far as performance of covenants and other terms is concerned  but asserts that the said performance was to be within the said period of the lease i.e. until 31st August 1999 and deny they were to indemnify the 1st defendant’s breach against all losses and damages incurred as a result of the defendant’s breach of lease outside the lease period and deny that they should be held liable to pay Kshs.6,095,38. 80 with interest as rayed by the plaintiff.

The defendants in its counterclaim claiming Kshs. 76,193, 283/- as special and general damages. The defendant’s relied on Mr. Nicholas Sumba’s testimony on how the plaintiff terminated the lease and closed the suit premises at the time when negotiations were ongoing. Further that the plaintiff while the defendants were in the process of granting it vacant possession stopped it from removing and relocating part of the remaining items from the suit premises with an estimated cost Kshs. 16,743,283/- whilst demanding Kshs. 5million. That it is a fact that the plaintiff held the defendants items as lien for restoration of the premises to its original position or by virtue of the illegal attachment attachment/proclamation pursuant to the decree in Nyeri HCCC No. 96 of 2000. That the plaintiff only released part of the items around 11th November 2004 adding that the plaintiff had locked the premises and controlled the movement of the 1st defendant after termination of the said lease and thus should be able to provide the release of items from the premises from the gate passes where the inventory of the items would have been taken as it would have been hard to do so once the items left the premises. That the plaintiff demands storage charges for the Cadillac whose whereabouts is not known. They proceeded to list the items advertised and auctioned by Whitestone Auctioneers. They relied on section 8 of the Distress for Rent Act Cap 293 adding that the court should also award the defendants damages for the plaintiff’s unlawful detention of their items part of which to-date the plaintiff has never released. That the damages claimed by the plaintiff amount to double claim of Kshs. 16,193,283/- adding that they should also be awarded Kshs. 60 million the conservative investment they had made in the suit premises noting that they only recovered Kshs.550,000/- from the sale of the items stored at Express Kenya. He further pointed out to the court that the said lease agreement  stated that, “the willing tenant takes account of the likelihood that he would be granted a new lease of the premises when the lease ends but does not take account of any good will belonging to anyone who has occupied the premises.”

They further added that the court should note that the security deposit held by the plaintiff was never taken into account. It was their submissions that they had proved their counterclaim and the same should be allowed.

In reply to plaintiff’s written submissions it was submitted that the plaintiff claims that the amendments after fact were inconsequential to the admissions already made adding that the amendments sought required leave of court and this made the pleadings non-existence and cannot be referred to in arguing the plaintiff’s case. That the defendant’s claim of misrepresentation cannot be time barred as the same arose after 31st August 1999 while the counter claim was made on 12th June 2002 before the lapse of 6 years. That the plaintiff claims Kshs. 20,000/- for storage of the Cadillac from 14th January 2002 until the same is collected this he argues was not sought in its amended plaint.

That the court cannot aid a party who has presented its case for purposes of prayers sought in a file filed way back in 1999. That previous the plaintiff had unconditionally sought to release the Cadillac only to turn around and impose conditions and instead of the plaintiff being held liable for illegally holding the defendant’s car it turns around and claims for storage charges.

Issues for determination

When was the lease agreement to commence and terminate?

Did the same provide for who was to carry out renovations and did they fulfill their obligation?

Was the plaintiff action in locking up the suit premises lawful?

Was the plaintiff justified in holding the defendant’s items as lien pending the payment of the money for renovations?

Did the plaintiff properly account for the defendant’s items collected from the suit premises?

Is the plaintiff entitled to the storage charges incurred in storing the Cadillac belonging to the defendants?

Is the plaintiff entitled to mesne profit?

Has the plaintiff proved his claim on a balance of probability?

Are the 2nd and 3rd defendants liable as guarantors for breach of the terms of the said lease?

If so, is he entitled to the damages sought and at what interest if any should the same attract?

Was the defendant’s claim time barred?

If not, has the defendant proved misrepresentation as against the plaintiff/its agents?

Have the defendants proved their counterclaim as against the plaintiff on a balance of probability?

Is the defendant entitled to the special and general damages sought?

It is not in dispute that the plaintiff and the 1st defendant entered into a lease agreement dated 25th August 1993. The said lease was for restaurant space of 12038 sqft at the mezzanine floor of Barclays plaza located on Loita street. The lease was for a period of 6 years from 1st September 1993 to 31/8/1999 the same was executed by the 1st defendants Director and the secretary and further guaranteed by the 2nd and 3rd defendants. However, at the expiration of the lease the tenant didn’t vacate but remained in the premises. The plaintiff pursued the matter in court and a court order was granted in 2000 March allowing it to take possession of the suit premises.

The defendant in its evidence admits that they did not handover the suit premises at the expiration of the said lease as they were still negotiating for a renewal of the lease as they were still negotiating for a renewal of the said lease and were hopeful that the same would be renewed. They however insist that the restaurant was not operating as the plaintiff had locked the premises and only their items were lying in the suit premises. From the said lease agreement at paragraph 4 (f) the tenant covenants “that in the third and the to re-decorate the premises in a good and workman like manner with appropriate materials of good quality to the satisfaction of the landlord any change in colors and patterns of such decorations to be proved by the landlord.” The defendants further argue that though there was a provision to restore the premises to its original status they could not do so as the plaintiff had closed the premises and had secured some of the items which they said would be used as security for restoring the premises to its original status. This is not refuted by the plaintiff though it argues that all that the defendant needed to do was to pay the amount owing. The defendant in their testimony of DW2 indeed admit to having not given possession of the said premises on termination of the lease and argue that they were still negotiating the renewal of the said lease. They however insist that the restaurant was not operating and only it is only their items that had been locked in the premises. However in March 2003 the plaintiff obtained court orders compelling the 1st defendant to hand over the premises. It was at this time that the plaintiff asked them to remove their items but somewhere along the way they refused the 1st defendant entry and sought to hold the items belonging to the 1st defendant as lien to cater for the costs of the repairs that were yet to be carried out by the 1st defendant.

From the evidence tendered in court the Plaintiff proceeded to hire services of an architect who came up with the work sheet of the required works to be done on the premises to return it in its original status. However there is no evidence of any communication or demands by the plaintiff to the 1st defendant to pay for the said repairs or carry out the repairs as per the terms of the lease, however was a provision in the lease agreement to restore the premises to its original status. The plaintiff proceeded to hire a contractor who carried out the said works. The contractor in his testimony in court confirmed that he carried out the renovation works for  Kshs.2,426,505. 90 and was paid  by the Plaintiff who had instructed him. The plaintiff has adduced evidence  of the work schedule, estimated cost and receipt issued by the contractors upon conclusion of carrying out the said works. In this regards I find that the plaintiff has proved his claim for damages for cost of renovation it incurred in restoring the suit premises to its required status in the sum of Kshs. 2,426,505. 90.

Is the 2nd and 3rd defendants jointly liable as guarantors?

The plaintiff claims as against the defendants jointly and severally for damages incurred in renovating the suit premises. In the case of Kenya Airways Limited vs. Mwaniki Gichohi, Ringera, J (as he then was) held that, “The concept of joint and several liability comprehends one judgment and decree against two or more persons who are liable collectively and individually to the full extent of such decree; however double compensation is not allowed and accordingly whatever portion of the decree is recovered against one of such defendant cannot be recovered from the other defendant(s).” It argues that the 2nd and 3rd defendants by virtue of having signed the lease agreement as guarantors are liable . From the court record the letter of offer to the 1st defendant from Lloyd Masika dated 12th May, 1993 at paragraph 3 indicates that the guarantors would be Mr. Edwin Ochieng and Mr. Joshua Kulei required to be joined in the lease. This term was further affirmed and the same was crystalized when the two guarantors signed the lease agreement dated 25th August 1993. From the said lease at paragraph 7 and schedule 8 provides that “perform the covenants and other terms of this lease and any time the tenant makes default in payment during the term the tenant makes any default in payment of the rent or in observing or performing any of the covenants or pother terms of the lease the Guarantors will pay the rents and observe or perform the covenants or terms in respect of the tenant is in default and make good to the landlord on demand and indemnify the landlord against all losses, damages, costs and expenses arising or incurred by the landlord as a result of non-payment, non-performance or non-observance notwithstanding.” The word guarantee is defined in Mozley & Whiteley’s Law Dictionary as “In the strict sense where one person contracts as surety on behalf of another on obligation to which the latter is also liable as the primary party.  A promise to answer for the debt, default or miscarriage of another, which to be enforceable must be evidenced in writing…..”

As evidenced by page 17 of the said lease the 2nd and 3rd defendants executed the said lease as guarantors to the 1st defendant whilst undertaking to ensure compliance with the covenants and to make good any defaults by the tenant. In respect to the above the 2nd and 3rd defendants signed the said lease as evidenced on page 17 of the said lease by so doing they consented to be bound by the said lease and as such they are jointly and severally liable, this was the finding in the case of Curtis vs. Chemical Cleaning & Dyeing Co. Ltd. [1951] 1 All E.R. 631 Lord Denning at page 633 H: where it was held that, “If a party affected signs a written document, knowing it to be a contract which governs the relations between him and the other party, his signature is irrefragable evidence of his assent to the whole contract, including the exemption clauses, unless the signature is shown to be obtained by fraud or misrepresentation.” From the foregoing it is evident that by signing the said lease the 2nd and 3rd defendants are bound by the same and as such they are both jointly and severally liable.

Was the plaintiff justified in locking up the suit premises and holding the defendant’s items as lien pending the payment of the money for renovations?

Section 3 of the Rent Distress Act Cap 293 gives the land lord the right of distress, it provides that, “Subject to the provisions of this Act and any other written law, any person having any rent or rent service in arrear and due upon a grant, lease, demise or contract shall have the same remedy by distress for the recovery of that rent or rent service as is given by the common law of England in a similar case.”From the above it is clear that the prerequisites for distress is that the rent or rent service must be in arrears and this must be based on a grant, lease, demise or contract.  Further Section 5 of the said Act also provides that, “Rent in arrear may be distrained for after determination of lease Any person having rent in arrear and due upon a demise, lease or contract after the ending or determination of the demise, lease or contract, may distrain for the arrears after the ending or determination in the same manner as he might have done if the demise, lease or contract had not been ended or determined”.I find that the plaintiff was justified in holding the defendants items as lien pending the payment of rent. Locking up the premises resulted as a result of the sour relationship between the parties.

Did the plaintiff properly account for the defendant’s items collected from the suit premises?

The plaintiff in their evidence testified that for any tenant to remove any items from the premises they had to be issued with a gate pass which noted down the items that were being moved. This record the 1st defendant claims would be instrumental in stating what was being moved either by them or by the plaintiff’s agents Gimco. The 1st defendants claims that some items such as the data beat machine were never accounted for from the list of items that were auctioned by the plaintiff’s agent. However from the plaintiff’s list of document the gate pass dated 9/3/2000 the same lists the data machine this in my view means that the 1st defendant actually left with the said machine. I find the 1st defendant should have questioned the agents they had tasked with removing the said items as to the whereabouts of the data beat machine. Further the 1st defendant claims that Cadillac is valued at 1. 3 million. In support of this it has adduced what appears to be a pull-out from the internet giving a history of Cadillac vehicle. The same placed the cost at 7,401 dollars. In my view this pull out though informative is of little probative value as the same does not amount to a valuation report. A valuation report in my view would give an estimated cost of a vehicle putting into consideration the age, and general condition of the car. This would have informed the court the proper value of the vehicle. On a balance of probabilities the plaintiff accounted for the documents collected from the premises.

Is the plaintiff entitled to the storage charges incurred in storing the Cadillac belonging to the defendants?

The plaintiff through their advocates’ letters dated 14th July 2013 and 23rd July 2004 advised the defendants to collect the retained items specifically the Cadillac or face storage charges. The 1st defendant appears not to have done so to-date and argues that the same formed part of his counter claim and also that he was opposed to paying the storage fees that had been attracted so far. A party must try as much as possible to mitigate its losses. The 1st defendant in its own testimony indicates that it did not collect the vehicle due to storage charges and never sought to have the same waived by the plaintiff’s agent back then. As such I find that the 1st defendant failure to do so continue to incur storage charges for as long as the vehicle remains at the plaintiff’s agent’s premises.  However I note that in the re-amended plaint dated 28th September 2007 the plaintiff does not seek compensation for storage charges for the said storage of the said Cadillac. A party is bound by its pleadings and more specifically what it is sought in its prayers for judgment. Noting that this vehicle has been in storage for quite a long period the defendant is ordered to pay reasonable charges for the storage and collect the same within 60 days from the date of this judgment in default the plaintiff is at liberty to dispose off the said Cadillac in a manner it deems fit.

Whether the plaintiff entitled to mesne profit?

I note from the re-amended plaint the plaintiff has struck out the prayer on mense profits and as such the same is taken to mean that it has abandoned the said prayer. The provisions of Order 8 rule 7 provides that, “(2) All amendments shall be shown by striking out in red ink all deleted words, but in such a manner as to leave them legible, and by underlining in red ink all added words.”

The provisions of Order VI Rule 4 of the Civil Procedure Rules provides that, “4 (1). A party shall in any pleading subsequent to a plaint plead specifically any matter, for example performance, release, payment, fraud, inevitable accident, act of God, any relevant statute of limitation or any fact showing illegality –

(a) which he alleges makes any claim or defence of the opposite party not maintainable; or

(b) which, if not specifically pleaded, might take the opposite party by surprise; or

(c) which raises issues of fact not arising out of proceeding pleading.”

A party is bound by their pleadings and as such I will not delve onto the findings of the same.

Whether the defendants have made a case of misrepresentation against the plaintiff?

The defendant in their testimony stated that there was misrepresentation by the plaintiff‘s agent that the lease would be extended claims the plaintiff refutes. During the negotiation and prior to the parties entering into the said lease agreement the 1st defendant via their letter dated 20th May 1993 to Mr. J. R. M. Lloyd Masika specifically paragraph 5 indicated that the defendant would be agreeable to accepting the offer to lease the suit premises on the basis that the plaintiff gave them an “optional renewal for a further 6 years.”The Plaintiff’s agent in reply to the said letter wrote to the defendant via a letter dated 31st May 1993 indicating that,“the landlord is not offering an option to renew on the lease at Barclays Plaza.”In the case of Newport Dry Dock & Engineering Co. v Paynter as well as Seligmann v Young referred to again in Bullen, Leake and Jacob:“The Statement of Claim must show the nature and extent of each alleged misrepresentation and it must contain particulars showing by whom and to whom it was made, and whether orally or in writing and if in writing, identifying the relevant document.”From the documents given no other communication was given by the plaintiff changing the position of renewal of the said lease. From the aforementioned communication I do not see any representation by the plaintiff that would have been relied on by the 1st defendant that the said lease would have been renewed. I find that the defendant has not proved on a balance of probability that there was any misrepresentation on the plaintiff’s part that the said lease would be renewed.

Whether the defendant is entitled to special damages of Kshs. 76,193,283/-?

The  defendants claim against the plaintiff for Kshs. 76,193,283 as special damages in regards to investments of Kshs. 60,000,000/-, items said to be detained by the plaintiff Kshs. 16,743,283. 00. I find that the defendants did not adduce any evidence oral or otherwise to support the same. It is not the duty of the court to look at the list of documents and make assumptions of the value of investment that was done or what the plaintiff never accounted for. I would have expected the defendants’ witnesses to produce documents to support the investment of 60,000,000/- and list of items the plaintiff is alleged to have detained .he who alleges must prove his claim. I  therefore find that the defendants counterclaim fails and is dismissed with costs to the plaintiff.

Final orders

I find that the plaintiff has proved its claim for damages accruing from renovating the suit premises on a balance of probability and as such is entitled to be compensated for the said Kshs.2,426,505. 90 with interest at but at 19% per year as per the lease agreement. The plaintiff did not adduce evidence on the base rate that was published on the period claimed. I note that there is a claim of Kshs. 3,413, 107. 20 at paragraph 12 of the re-amended plaint the plaintiff claims a sum of 3,732,296. 20 .I find that the plaintiff is not entitled to the said sums in this suit as this is not a declaratory suit. The claim for Kshs. 3,732,296. 20 should have been pursued in HCCC 96 of 2000 in Nyeri further it is also not prayed for in the plaintiff’s prayers in its plaint.  I therefore enter judgment for the plaintiff against the defendants jointly and severally in the sum Kshs. 2,426,505. 90 with interest at 19% per year from the date of filing suit until payment in full. The plaintiff shall have costs of the suit. Orders accordingly.

Dated, signed and delivered this           30th      day of  September    2015.

R. E. OUGO

JUDGE

In the presence of:-

………………………………………….….…………………For the Plaintiff

.………………..…………………………….…….…….……For the 1st Defendant

.………………..…………………………….….….….For the 2nd & 3rd Defendant

……………………….…………………….………………........………….Court Clerk