Suleiman Mohamed Said Suleiman Al-Busaidy & another v Shell Company of East Africa Limited & 2 others [2018] KEELC 3863 (KLR)
The bottom line
#Kenya's Environment and Land Court ended Shell's 80-year Mombasa lease for unpaid rent, declared the new occupier a trespasser, and gave it 120 days to vacate.
What this practically means
#Executive summary
#Key legal issues
#Whether the plaintiffs had letters of administration
Yes; the plaintiffs were appointed administrators on 14 June 2002, grant confirmed 10 October 2013, but the documents were only made available to the defendants in 2015
The issue was not contested. The court found the discontent was that the plaintiffs never communicated their capacity as administrators until the demand notice. The estate was previously represented by the law firms of Pandya & Talati and Y.A. Ali & Co, and no evidence showed the letters of administration were shared with the defendants, who requested them without success.
Whether the 1937 lease was terminated
Yes; terminated for non-payment of rent
The lease required rent annually in advance and gave the landlord a right of re-entry on unpaid rent or breach after due notice of not less than six months. The defendants' own documents showed rates paid in arrears in 2007 and no proof of rent payment. The notice of 20 May 2010 and 12 July 2010 complied with section 58 of the Registered Land Act (repealed), was not challenged by the defendants, and the landlord did not accept rent after the notice, so the lease terminated.
Whether the transfer of the lease to the 3rd defendant was lawful
No; the assignment was effected without the head lessor's consent and the subsequent waiver was of no legal consequence
The lease required written consent of the landlord for assignment. The 1st and 2nd defendants showed no request for consent made prior to the assignment. The waiver obtained on 20 September 2013 under section 54(2) of the Land Registration Act was futile because the lease had already expired and possession had been parted with contrary to the lease; moreover the 3rd defendant, who corresponded seeking consent, was not a party to the lease.
Whether the plaintiffs unreasonably withheld consent
No; no request for consent was made prior to the assignment that the plaintiffs could be blamed for unreasonably withholding
The plaintiffs' failure to respond to post-assignment correspondence amounting to withholding of information was noted, but the court held the 1st and 2nd defendants never applied for consent before assigning, which itself constituted a ground for forfeiture under Mnazi Moja Estates. No proof was made that obtaining consent would involve incurring of significant costs as envisaged in the Land Act.
Whether the 3rd defendant is a trespasser
Yes; it entered and remained without the plaintiffs' consent since no valid lease was transferred
Distinguishing Mohamed Abdalla Shikely, the initial entry was not with the plaintiffs' consent but that of the 1st and 2nd defendants, and the lease required head lessor's consent which was never obtained. The court distinguished Aroko v Ngotho because no rent was accepted after the notice, and the plaintiffs filed an action as contemplated by section 56(2) of the Registered Land Act.
Legal principles established
#- A landlord's right to terminate accrues where the tenant fails to pay rent in advance as dictated by the lease, and termination is effective where a notice with reasons is served and not challenged
- A tenant is bound to seek the head lessor's consent before assigning a lease, failing which the assignment is vulnerable to forfeiture
- Entry onto land without the head lessor's consent to the assignment renders the assignee a trespasser
Court orders
#- 1.Declaration that the 1937 lease was terminated by breach of non-payment of rent
- 2.Plaintiffs granted prayers (a)-(g) of the plaint against the defendants jointly and severally, including declarations of trespass and eviction/vacant possession
- 3.Damages assessed as mesne profits of unpaid rent for the period of default from the year 1985, with interest at court rates from date of filing of suit till payment in full
- 4.Costs of the suit awarded to the plaintiffs
- 5.3rd defendant's counter-claim dismissed with no order as to costs
- 6.3rd defendant given 120 days to vacate the suit premises, failing which the plaintiffs may evict using lawful means
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court in a claim relating to land, LR No. Mombasa/Block XVIII/244
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Suleiman Mohamed Said Suleiman Al-Busaidy & another v Shell Company of East Africa Limited & 2 others [2018] KEELC 3863 (KLR)", Case Analysis (2018). ELC Case No. 16 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3863/eng@2018-03-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.