National Social Security Fund v Sokomania Limited & 3 others [2018] KEELC 4553 (KLR)
The bottom line
#Kenya's Environment and Land Court ruled that parking bay licensees are not automatically protected tenants, and tribunals cannot make final rulings on interim applications.
What this practically means
#Executive summary
#Key legal issues
#Whether the tribunal properly made final findings on the nature of the parties' relationship in an interlocutory application
The tribunal erred by making conclusive findings that the relationships were landlord and tenant at an interlocutory stage; such issues could only be determined conclusively at the hearing of the complaints.
The applications before the tribunal were for interlocutory injunctions calling for an exercise of discretion. The tribunal instead made final determinations that the 3rd Respondent was the Appellant's tenant, that the 1st and 2nd Respondents were subtenants, and that the Appellant became their landlord by operation of law. These were conclusive findings inappropriate to an interim application.
Whether the car park agreements created leases or licenses and whether the 1st and 2nd Respondents were protected tenants
The contract between the Appellant and the 3rd Respondent was strictly a management and service contract with no power to sublet; the tribunal's finding of a landlord-tenant relationship and protected tenancies was not supported by the evidence.
The Appellant tendered for management and collection of parking fees services; the 3rd Respondent was paid a commission. Nothing in the contract allowed subletting. The tribunal stated the correct law on leases and licenses but failed to apply it to the facts. The claim of protected tenancy under the Act was therefore unsustainable on the material before the tribunal.
Whether the tribunal properly exercised its discretion in granting the interlocutory injunctions
The tribunal misdirected itself: it failed to consider irreparable harm and compensation in damages, and failed to consider the evidence that the Appellant might be a Government agency exempt from the Act.
The 1st and 2nd Respondents relied only on possession and did not demonstrate irreparable injury not compensable in damages; indeed the 2nd Respondent had already filed a civil suit to recover its deposit. The tribunal also ignored evidence that the Appellant was subject to the Public Procurement and Disposal Act, which raised the possibility it was a Government agency exempt under the proviso to section 2(1) of the Act.
Whether the tribunal erred in discharging the 3rd Respondent from the proceedings
The tribunal erred; the 3rd Respondent was a necessary party whose presence would enable effective and conclusive determination of all issues.
The order discharging the 3rd Respondent was made without being called upon by any party. Given that the complaints concerned the relationships with the 3rd Respondent as licensor/agent, its presence was necessary for a full determination of the disputes.
Whether the tribunal had jurisdiction to grant injunctive relief
The tribunal has jurisdiction to grant injunctions, as held by the Court of Appeal in John Mugo Njuguna vs. Margaret M. Murangi; the tribunal's failure to address the point did not validate its otherwise flawed exercise of discretion.
Although the tribunal failed to address the jurisdictional objection, the court held the tribunal did have jurisdiction to issue injunctions under the Act. The appeal succeeded not on lack of jurisdiction to enjoin, but on the tribunal's misdirections in exercising that discretion.
Whether the 4th Respondent's dismissed applications could be granted on appeal despite its failure to appeal
Since the Appellant appealed the whole decision, the court under Order 42 rule 5 of the Civil Procedure Rules had power to grant the 4th Respondent's prayers (b) and (g).
The 4th Respondent had not appealed the dismissal of its own applications, but the Appellant appealed against the whole decision of the tribunal. Under Order 42 rule 5, the court could grant the 4th Respondent's prayers within the appeal. The court found the 4th Respondent had sufficient interest to be joined as an interested party but most of its other orders could not be granted at interlocutory stage.
Legal principles established
#- An appellate court should not interfere with the exercise of discretion by a tribunal unless it misdirected itself in some matter and arrived at a wrong decision, or it is manifest that it was clearly wrong in the exercise of its discretion.
- A court in an interlocutory appeal where the suit is yet to be tried should refrain from expressing concluded views on issues which may arise in the pending trial.
- The Business Premises Rent Tribunal has jurisdiction to grant an order of injunction on a complaint.
- Whether an agreement is a lease or a license depends on its substance, not the name the parties give it; however, a management and service contract without a power to sublet cannot found subtenancies.
- An applicant for an interlocutory injunction must establish a prima facie case with a probability of success, irreparable injury not compensable in damages, and, if in doubt, the balance of convenience.
- A first appellate court has a duty to consider and re-evaluate the evidence on record and draw its own conclusions.
Court orders
#- 1.The appeal is allowed and the orders made by the tribunal on 27th May, 2016 are set aside
- 2.The 1st Respondent's Notice of Motion dated 7th January, 2016 in Tribunal Case No. 15 of 2016 and the 2nd Respondent's Notice of Motion dated 7th January, 2016 in Tribunal Case No. 12 of 2016 are dismissed with costs
- 3.The 4th Respondent's Notice of Motion applications dated 14th January, 2016 in Tribunal Case No. 12 of 2016 and Tribunal Case No. 15 of 2016 are allowed with costs in terms of prayers (b) and (g) thereof
- 4.The Appellant shall have the costs of the appeal
- On appeal from
- Business Premises Rent Tribunal
- Tribunal Case No. 12 of 2016 (consolidated with Tribunal Case No. 15 of 2016)
- Jurisdiction invoked
- First appeal from the Business Premises Rent Tribunal; court exercising power under Order 42 rule 5 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "National Social Security Fund v Sokomania Limited & 3 others [2018] KEELC 4553 (KLR)", Case Analysis (2018). Tribunal Appeal re: Tribunal Case No. 12 of 2016 and Tribunal Case No. 15 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4553/eng@2018-02-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.