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ELCDismissedNot stated in judgment (suit commenced by plaint on 21 March 2014)· [2016] KEELC 840 (KLR)

Kenol Kobil Limited v David Mugo Ndumia, James Mwangi Ndumia, Julia Nyaguthi Ndumia & Mary Njambi Ndumia (Sued as the Administration and Legal Representatives of the Estate of Danson Ndumia Murukia (Deceased) & 2 others [2016] KEELC 840 (KLR)

Environment and Land Court
5 May 2016
2,917 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court refused to stop an oil company's eviction because its lease renewal notice was sent to the wrong estate administrators.

What this practically means

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Executive summary

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The plaintiff, an oil company, leased L.R No. 6585/506 in Nyahururu Town for 13 years from 1 March 2000 to run a petrol service station, with an option to renew for a further 10 years. It sued the administrators of the deceased lessor's estate, seeking a permanent injunction, a declaration that it had exercised its option to renew, and specific performance of a fresh 10-year lease. Together with the plaint it sought an interlocutory injunction under Order 40 restraining eviction or interference with its possession pending trial. The defendants opposed, contending the unsigned rent schedule was not part of the lease, that the renewal notice was sent to the wrong persons at the wrong address after the administrators had changed and the property had vested in the 2nd and 3rd defendants under a confirmed grant, and that the lease expired on 1 March 2013 leaving only a periodic tenancy under Cap 301. Applying Giella v Cassman Brown, the court made a preliminary assessment and held that the administration of the estate had so changed that a renewal notice addressed to the original administrators at the lease address could not be good notice; it also held that Clause 4 of the lease, requiring rent to be agreed or fixed by arbitration, was the substantive renewal clause, contradicting the plaintiff's reliance on continued 15% increases under the unsigned schedule. No prima facie case with a probability of success was established and the injunction application was dismissed with costs, the court noting its findings were provisional and obiter remarks encouraging negotiation or arbitration.

Key legal issues

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01

Whether the option to renew was properly exercised

Holding

On a preliminary assessment, the court doubted that the option was properly exercised because the renewal notice was sent to the original administrators whose administration had ceased, after the property had vested in the 2nd and 3rd defendants under a confirmed grant

Reasoning

The lease was executed by Jane Wairimu Ndumia and James Mwangi Ndumia as personal representatives. Before the 30 October 2012 renewal notice, James Mwangi Ndumia had died, new administrators had been enjoined, and on 20 July 2011 the confirmed grant vested the premises in the 2nd and 3rd defendants in equal shares. A notice addressed to persons no longer administering the estate, at the lease address, could not be good notice.

p. 4
02

What rent was payable upon renewal - the schedule's continued 15% increases or rent to be agreed/referred to arbitration

Holding

Clause 4 of the lease is the substantive renewal clause; it provides for rent to be mutually agreed and, failing agreement, determination by a single arbitrator appointed by the Chairman of the Institute of Chartered Surveyors

Reasoning

The court found a conflict between the rent provisions in the body of the lease (continued 15% increases per an attached schedule) and Clause 4 (rent to be agreed or fixed by an arbitrator). It gave greater weight to Clause 4 as the substantive renewal clause, since the arbitration mechanism would serve no purpose if the 15% escalation was intended to continue.

p. 4
03

Whether the plaintiff established a prima facie case for injunction

Holding

No prima facie case with a probability of success was established; the application was dismissed with costs

Reasoning

Applying Giella v Cassman Brown, the court made a preliminary assessment of the plaintiff's case. Given the doubts over the validity of the renewal notice and over the plaintiff's contention on rent, the plaintiff failed at the first limb and the injunction could not issue. The court stressed the finding was preliminary and a different finding could follow trial.

p. 4

Legal principles established

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  • The Giella v Cassman Brown principles govern interim injunctions: prima facie case with probability of success, irreparable loss, and balance of convenience if in doubt
  • Where the administration of an estate has changed and the property has vested in new administrators under a confirmed grant, notice under the lease addressed to the former administrators at the lease address may not be good notice

Court orders

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  1. 1.The plaintiff's application for injunction is dismissed
  2. 2.Costs of the application awarded to the defendants

Authorities

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Legislation

  • Landlord and Tenant (Shops, Hotels and Catering Establishments) ActCap 301
  • Civil Procedure RulesOrder 40

Cases cited (1)

  • Giella vs Cassman Brown
    (1973) EA 358
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over disputes relating to land; application brought under Order 40 of the Civil Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenol Kobil Limited v David Mugo Ndumia, James Mwangi Ndumia, Julia Nyaguthi Ndumia & Mary Njambi Ndumia (Sued as the Administration and Legal Representatives of the Estate of Danson Ndumia Murukia (Deceased) & 2 others [2016] KEELC 840 (KLR)", Case Analysis (2016). Not stated in judgment (suit commenced by plaint on 21 March 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/840/eng@2016-05-05

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.