Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELCDismissed· [2018] KEELC 2309 (KLR)

New Calabash Limited v Joseph Odero [2018] KEELC 2309 (KLR)

Environment and Land Court
24 July 2018
BEB M Eboso
2,267 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

#

A Kenyan court confirmed that subletting a business premises without the landlord's written consent is grounds for losing the tenancy entirely.

What this practically means

#

Executive summary

#
This was a first appeal to the Environment and Land Court at Nairobi from the Business Premises Rent Tribunal, which on 13th October 2017 had dismissed the tenant's reference and allowed the landlord's statutory notice of termination dated 1st July 2016 issued under Section 4 of Cap 301. The respondent landlord was the registered proprietor of LR. No. 2259/240 on Ngong Road, Karen, and had leased it to the appellant tenant for five years from 1st July 2011. Having earlier signalled willingness to renew, the landlord changed his mind on discovering unconsented subletting. The appellant raised seven grounds of appeal, arguing that the Tribunal ignored the real (extraneous) motive for termination, the appellant's investments, the relevant law, and the protective injunction enjoyed by one sub-tenant, and invoked equitable and proprietary estoppel based on the landlord's 3rd June 2015 letter. The court, re-evaluating the evidence as required on a first appeal, held that Clause J of the tenancy agreement prohibited subletting without the previous written consent of the lessor; that the appellant's director admitted having no such consent; and that tenancy agreements with two sub-tenants (at Kshs 320,000 and Kshs 75,000 monthly) were on record. The claimed structures were found to belong to the sub-tenants, and the appellant adduced no evidence of its own investment. Subsequent events did not cure the substantial breach, which was a valid termination ground under section 7 of Cap 301. The appeal was dismissed with costs to the respondent.

Key legal issues

#
01

Whether the appellant sublet the suit premises without the landlord's written consent in breach of the tenancy agreement

Holding

The appellant breached the covenant against subletting by leasing parts of the premises to Disney Land Nature Tours & Travel (Jennifer Njoki Kairu) at Kshs 320,000 per month and Deep Blue Limited at Kshs 75,000 without the respondent's consent

Reasoning

Clause 1(i)/Clause J of the tenancy agreement prohibited transfer, subletting or parting with possession without the previous written consent of the lessor. The appellant's director, Charles Wachira Ngundo, admitted in evidence that he had no written or oral consent to sublet. Sub-tenancy agreements and receipts were on record, and a sub-tenant's director gave evidence before the Tribunal.

p. 3
02

Whether the subletting constituted a statutory ground for termination under section 7 of Cap 301

Holding

Yes - subletting without written consent was a substantial breach of the tenant's obligations and a valid ground for termination of the controlled tenancy

Reasoning

Section 7 of Cap 301 permits termination where the tenant commits a substantial breach of his obligations under the tenancy. The unconsented subletting was such a breach; the Tribunal properly established the statutory ground and the court on first appeal found no fault in that finding.

p. 3
03

Whether the appellant's alleged investments and improvements on the premises entitled it to relief against termination

Holding

No - the evidence showed the claimed structures were erected and owned by the sub-tenants, and the appellant presented no evidence of its own investments

Reasoning

Johny Macmillan, a director of Deep Blue Limited, testified that the sub-tenant constructed a kitchen, bar and restaurant; Caroline Nyarai Kairu testified that Disney Land Nature Tours & Travel constructed the butchery. The appellant passed off the sub-tenants' investments as its own and adduced no valuation report or other evidence of its alleged Kshs 35 million investment.

p. 3

Legal principles established

#
  • Subletting leased premises without the landlord's prior written consent where the lease expressly prohibits it is a substantial breach constituting a statutory ground for termination of a controlled tenancy under section 7 of Cap 301
  • On a first appeal from a tribunal, the appellate court must re-evaluate the evidence and make its own findings and conclusions
  • Subsequent events such as a sub-tenant vacating or an injunction protecting a sub-tenant do not cure an antecedent substantial breach of the tenancy covenant

Court orders

#
  1. 1.The appeal is dismissed
  2. 2.The respondent shall have costs of the appeal

Authorities

#

Legislation

  • Landlord and Tenant (Shop, Hotels and Catering Establishments) Act (Cap 301)Section 4; Section 4(2); Section 2; Section 7; Section 7(1)

Cases cited (4)

  • Sifa International Ltd vs. National Social Security Fund Board of Trustees (2011)eKLR
    (2011) eKLR
  • Shah vs. Shah (1981)KLR 375
    (1981) KLR 375
  • Kasturi Ltd vs. Nyeri wholesalers Ltd
    Nyeri CA No. 248 of 2012
  • Nairobi Housing Development Ltd vs. Highridge Corner Bar Ltd
    Nairobi HCCA No. 110 of 1978
On appeal from
Business Premises Rent Tribunal
Not stated in judgment
Jurisdiction invoked
First appellate jurisdiction over the Business Premises Rent Tribunal; the tenancy was a controlled tenancy under the Landlord and Tenant (Shop, Hotels and Catering Establishments) Act (Cap 301)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (3)

#

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

Cite this brief

#

Cite this brief

Caselaw, "New Calabash Limited v Joseph Odero [2018] KEELC 2309 (KLR)", Case Analysis (2018). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/2309/eng@2018-07-24

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