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ELCPartially AllowedELC Case No. 16 of 2016· [2018] KEELC 3863 (KLR)

Suleiman Mohamed Said Suleiman Al-Busaidy & another v Shell Company of East Africa Limited & 2 others [2018] KEELC 3863 (KLR)

Environment and Land Court
22 March 2018
7,040 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~28 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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The plaintiffs, administrators and heirs of the estate of Mohamed Said Suleiman Al-Busaidy, sued the 1st and 2nd defendants and the 3rd defendant over LR No. Mombasa/Block XVIII/244, the subject of a 99-year lease granted to Shell Company of East Africa in 1937. They sought declarations that the lease was terminated, that the assignment of the lease to the 3rd defendant and the Registrar's waiver of the head lessor's consent were irregular and fraudulent, that the defendants were trespassers, plus injunction, eviction, damages for trespass and breach of contract, and costs. The 3rd defendant counter-claimed, alleging the plaintiffs unreasonably withheld consent and seeking validation of the waiver and registration of the transfer. The court found the plaintiffs were duly appointed administrators whose documents were only shared with the defendants in 2015. It held the lease was terminated for non-payment of rent, the notices of May and July 2010 complied with section 58 of the Registered Land Act (repealed) and were never challenged. The assignment to the 3rd defendant was effected without the head lessor's consent, and the waiver obtained in 2013 was of no legal consequence because the lease had already expired. The court distinguished Aroko v Ngotho and Mnazi Moja Estates, holding that a tenant must seek consent before assigning. The plaintiffs were granted prayers (a)-(g), damages assessed as mesne profits from 1985 with interest, and costs. The counter-claim was dismissed with no order as to costs, and the 3rd defendant was given 120 days to vacate.

Key legal issues

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01

Whether the plaintiffs had letters of administration

Holding

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

Reasoning

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.

p. 5
02

Whether the 1937 lease was terminated

Holding

Yes; terminated for non-payment of rent

Reasoning

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.

p. 6
03

Whether the transfer of the lease to the 3rd defendant was lawful

Holding

No; the assignment was effected without the head lessor's consent and the subsequent waiver was of no legal consequence

Reasoning

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.

p. 7
04

Whether the plaintiffs unreasonably withheld consent

Holding

No; no request for consent was made prior to the assignment that the plaintiffs could be blamed for unreasonably withholding

Reasoning

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.

p. 6
05

Whether the 3rd defendant is a trespasser

Holding

Yes; it entered and remained without the plaintiffs' consent since no valid lease was transferred

Reasoning

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.

p. 7

Legal principles established

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  • 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

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  1. 1.Declaration that the 1937 lease was terminated by breach of non-payment of rent
  2. 2.Plaintiffs granted prayers (a)-(g) of the plaint against the defendants jointly and severally, including declarations of trespass and eviction/vacant possession
  3. 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. 4.Costs of the suit awarded to the plaintiffs
  5. 5.3rd defendant's counter-claim dismissed with no order as to costs
  6. 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

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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, "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.