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ELCPartially AllowedNot stated in judgment (Nairobi ELC; Plaintiff's Notice of Motion dated 25th January 2017 and Defendants' Notice of Motion dated 7th February 2017)· [2017] KEELC 2972 (KLR)

Tusker Mattress Ltd v Bank of Baroda (Kenya) Ltd & another [2017] KEELC 2972 (KLR)

Environment and Land Court
19 April 2017
EOE. O. Obaga
2,371 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 ordered a supermarket to vacate its premises because unpaid rent made its lease renewal option unenforceable.

What this practically means

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Executive summary

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This ruling by the Environment and Land Court at Nairobi (E.O. Obaga, J) dealt with two competing injunction applications arising from a lease of LR No.209/1419 on Tom Mboya Street, Nairobi, held by the first defendant and leased to the Plaintiff, which operated a supermarket (Tuskeys Beba Beba). The lease ran from 1st November 2011 to 31st January 2017. The Plaintiff sought a temporary injunction restraining interference with its quiet enjoyment or eviction, claiming an automatic renewal option under clause II which it had invoked before expiry. The defendants opposed, contending renewal was conditional on compliance with all lease terms, that the Plaintiff was in rent arrears of over Kshs.6,000,000 (distress having been levied), and that the Plaintiff had declined an offer of a one-year licence at Kshs.7,500,000 per month to wind up its business. The second defendant had deposited Kshs.100,000,000 towards purchase and was servicing a Kshs.300,000,000 loan. The court applied Giella v Cassman Brown, and held the Plaintiff's breaches disentitled it to equitable relief; citing Ripples Ltd v Kamau Mucuha and West Country Cleaners v Sally, it found the renewal option unenforceable and dismissed the Plaintiff's motion with costs. On the defendants' notice of motion dated 7th February 2017 seeking a mandatory injunction for vacant possession, the court applied Halsbury's Laws (Vol. 24) and Locabail International Finance Ltd v Agro-Export, found special circumstances including the Plaintiff's subletting without consent and 'stealing a march', and allowed prayers (2), (3) and (4), compelling the Plaintiff to hand over vacant possession, with costs to the defendants.

Key legal issues

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01

Whether the Plaintiff established a prima facie case for a temporary injunction to preserve its claimed right of lease renewal

Holding

No prima facie case was established; the Plaintiff was itself in breach of the lease through rent arrears, disentitling it to equitable relief

Reasoning

The court found from the defendants' affidavits that the Plaintiff was in rent arrears exceeding Kshs.6,000,000, distress had been levied, and the Plaintiff had not followed the lease's renewal process (agreement on new rent or appointment of a surveyor). Relying on Ripples Ltd v Kamau Mucuha, a party in breach cannot obtain an injunction. The Plaintiff's non-disclosure of the licence negotiations further disentitled it.

p. 3
02

Whether the option to renew the lease was enforceable despite the Plaintiff's breaches

Holding

The breaches rendered the option to renew unenforceable

Reasoning

Applying West Country Cleaners (Falmouth) Ltd v Sally, a tenant in breach at the relevant date cannot enforce an option to renew. The Plaintiff had also participated in exit negotiations for a one-year licence, showing the renewal clause had lapsed in practice.

p. 3
03

Whether a mandatory injunction for vacant possession could issue at the interlocutory stage

Holding

Yes - this was a clear case warranting an interlocutory mandatory injunction

Reasoning

Applying Halsbury's Laws and Locabail International Finance Ltd v Agro-Export, the court found special circumstances: the lease had expired, the Plaintiff was in breach, had sublet without consent while paying no rent, and was 'stealing a march' on the second defendant who was servicing a loan on premises it could not enjoy. The court felt a high degree of assurance the injunction would be upheld at trial.

p. 4

Legal principles established

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  • A contracting party in breach of the contract cannot obtain an injunction to restrain breach by the other party, as that would be inequitable
  • A tenant in breach of covenants at the time the option to renew falls to be exercised cannot enforce the renewal option, however trivial the breaches
  • A mandatory injunction may be granted at the interlocutory stage in clear cases or where the defendant attempts to steal a march, and the court must feel a high degree of assurance about the outcome at trial
  • An applicant for the discretionary equitable remedy of injunction must disclose all material facts and do equity

Court orders

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  1. 1.Plaintiff's Notice of Motion dated 25th January 2017 dismissed with costs to the defendants
  2. 2.Defendants' Notice of Motion dated 7th February 2017 allowed in terms of prayers (2), (3) and (4), granting a mandatory injunction compelling the Plaintiff to hand over vacant possession
  3. 3.Defendants awarded costs of the Plaintiff's Notice of Motion dated 25th January 2017

Authorities

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Cases cited (4)

  • Giella Vs Cassman Brown & Co. Ltd
    (1973) EA 358
  • Ripples Ltd Vs Kamau Mucuha
    NBI HCCC No. 4522 of 1992
  • West Country Cleaners (Falmouth) Ltd Vs Sally
    (1966) 3 ALL ER 210
  • Locabail International Finance Ltd Vs Agro-Export
    (1988) 1 ALL ER 90
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a dispute concerning a lease of land (LR No.209/1419); no specific constitutional provision cited

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Tusker Mattress Ltd v Bank of Baroda (Kenya) Ltd & another [2017] KEELC 2972 (KLR)", Case Analysis (2017). Not stated in judgment (Nairobi ELC; Plaintiff's Notice of Motion dated 25th January 2017 and Defendants' Notice of Motion dated 7th February 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/2972/eng@2017-04-19

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